NEW DELHI (Reuters) - India plans to sell refined crude oil products to Myanmar as part of New Delhi’s efforts to deepen ties with its eastern neighbour, which is expected to see strong demand for fuels as it builds new roads, factories, utilities and airports.
Indian oil minister Dharmendra Pradhan began a five-day trip to Myanmar on Monday, scouting for opportunities in oil exploration, refining and products retailing.
Prime Minister Narendra Modi wants to expand ties with the country’s eastern neighbours including Myanmar to develop its landlocked northeastern states.
Pradhan is also expected to discuss laying fuel and gas pipelines linking India’s northeastern states with Myanmar.
The Indian oil minister’s trip comes months after Myanmar leader Aung San Suu Kyi visited New Delhi, courting investments in sectors left in disarray under nearly 50 years of a military dictatorship.
A sweeping electoral victory for Suu Kyi’s party in 2015 paved the way for the lifting of U.S. sanctions against her country last year.
Numaligarh refinery Ltd (NRL), a unit of India’s state-run Bharat Petroleum Corp, is looking at selling gasoil into northwest Myanmar, its managing director said.
“Initially it will be a small quantity. We will look for a long-term contract for diesel exports after expansion of our refinery, ” Padmanabhan told Reuters.
NRL plans to treble its refining capacity to 180,000 barrels per day in four to five years.
Myanmar’s refined fuels consumption is estimated to rise at an average annual rate of 6 percent over the next 10 years to 2026, BMI Research, a unit of credit ratings agency Fitch Group, said last month.
“Demand for automotive fuels (gasoline, diesel) will grow particularly strongly, as rising consumer wealth and car ownership combine to rapidly expand the size of Myanmar’s vehicle fleet at a healthy clip of 18.6 percent per annum over the next five years,” it said.
B. Ashok, chairman of India’s top refiner Indian Oil Corp earlier this month said his firm was looking for downstream opportunities and the sale of refined fuels to Myanmar.
ONGC Videsh Ltd, a unit of Oil and Natural Gas Corp last year said his firm was in exploratory talks with Gazprom for the supply of natural gas through a complex swap involving Russia, China and Myanmar.
Reporting by Nidhi Verma and Neha Dasgupta; Editing by Greg Mahlich