Bangladesh said to scrap Darshan Hiranandani’s gas supply plan, India unlikely to intervene

New Delhi: India is aware of reports that Bangladesh has cancelled a proposed agreement with the Darshan Hiranandani-led H-Energy group to supply gas, but New Delhi is unlikely to intervene in the matter.

The Mumbai-based company was to supply regasified liquified natural gas (LNG) to the energy deficient neighbour. 

The Bangladesh newspaper The Business Standard reported in April that state-owned Petrobangla is close to signing agreements on import of regasified LNG from an Indian private company through a cross-border pipeline.

However, a recent report on Twitter suggested that the Bangladesh government is planning to cancel the project and imports after a US company, Excelerate Energy, which already has operations in Bangladesh, showed an interest in expanding its supplies to the country.

‘New Delhi is aware’

New Delhi is “aware” of the reports concerning the Hiranandani-led H Energy and Bangladesh, said a senior official in the know of the developments.

“The (Indian) government would not intervene in this matter. It concerns with a private company. There are several other significant issues that can be taken up,” the official added.

According to The Business Standard’s April report, after four years of negotiation, Petrobangla was set to enter into two agreements with H-Energy for pipeline installation and LNG supplies. 

Discussions on the payment mechanism, pipeline management, and LNG price were underway. 

As per the report, a 65-km pipeline was to be laid from Satkhira to Khulna in Bangladesh to transport gas from India. The plan was to import 300 million cubic feet of LNG daily through the pipeline.

The same paper reported last month that Excelerate CEO Steven Kobos had met with Bangladesh’s Chief Advisory Prof Muhammad Yunus, who heads the interim government, in Dhaka in mid-October.

It quoted Kobos as saying the company wants to “scale up and ensure a smooth supply of Liquefied Natural Gas” to the country. It said the company also plans to invest in decarbonization projects in Bangladesh, quoting a press statement issued on 15 October.

However, on 17 October, a second Bangladesh newspaper, The Daily Star, quoted Petrobangla officials as saying the interim government has decided not to sign an agreement with Excelerate Energy to build another regasification plant for liquefied natural gas (LNG).

It said an Excelerate delegation headed by former US Ambassador to Bangladesh Peter D. Haas, who is now a strategic adviser to Excelerate, had met with Petrobangla officials. “Petrobangla has cancelled a memorandum of understanding (MoU) for signing the deal,” the paper said, quoting Petrobangla officials.

The Bangladesh team was led by Petrobangla chairman Zanendranath Sarker.

The Daily Star quoted Petrobangla officials as saying Dhaka had cancelled yet another deal – with the domestic Summit Group – to build a floating storage and regasification unit (FSRU).  

It said there are currently two FSRUs that in Bangladesh – one run by the Summit Group and the other by Excelerate Energy. The same two companies had plans to start one more FSRU each, which now stand cancelled.

“The previous government awarded the works under the controversial Quick Enhancement of Electricity and Energy Supply Act 2010 without any tender process,” it quoted a top Petrobangla official as saying.

H-Energy declined to comment on the issue while queries mailed to the union petroleum minister, external affairs minister, Petrobangla, Excelerate Energy and the Bangladesh High Commission in Delhi and the US Embassy in Dhaka remained unanswered till press time. 

The spokesperson of the US Embassy in New Delhi replied: “I’d have to refer you to the companies involved to discuss their interest. We don’t have anything on this from the Embassy.”

H-Energy was established in 2009 to operate in the sustainable energy space. It is currently developing LNG re-gasification terminals and cross-country pipelines on the west and east coast of India. Through its marketing arm, it is is also offering end-to-end natural gas solutions including LNG sourcing, re-gasification facilities, downstream deliveries based on customer preference, according to the company website.

The development comes at a time when India-Bangladesh ties are at a critical juncture post the ouster of the India-friendly Sheikh Hasina-led Awami League government.

India has significant energy ties with its eastern neighbour.

Mint had reported on September 1 that India’s plan to further extend the India-Bangladesh Friendship pipeline (IBFP) carrying diesel to its neighbour has gone in the slow lane amid the political crisis in the neighbouring country.

There had been a proposal to extend the 131-km pipeline beyond Parbatipur in Bangladesh, where the pipeline currently ends. However, the government has now pressed the pause button on this.

The cross-border pipeline inaugurated in March last year by prime minister Narendra Modi and his erstwhile Bangladeshi counterpart Sheikh Hasina stretches from Siliguri in West Bengal to an oil depot in Parbatipur in Dinajpur district of Bangladesh.

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