India facing stiff competition for Myanmar gas

Friday, 06 October 2006, 19:30 IST
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New Delhi: India is facing stiff competition from China, South Korea and Thailand for gas supplies from Myanmar, where state-owned ONGC Videsh and GAIL (India) Ltd together hold 30 percent stake in two offshore exploration blocks. Designated to handle gas purchase and marketing, GAIL had early last month bid for gas from Block A-1 and adjacent Block A-3, which are estimated to hold 5.7-8.6 trillion cubic feet (TCF) of recoverable gas reserves. While India, China and Thailand had put in bids for gas supply at their respective borders, South Korea's bid was for liquefying the gas and transporting it in the form of liquefied natural gas (LNG). "Though the bids have been opened, not much is known about the outcome. The Myanmar government is reportedly not happy with the gas price offered in the bids and is likely to initiate separate discussions with each country," official sources told IANS. "Besides the price factor, political and strategic reasons are expected to influence the final deal. The picture will become clear in a week or so. It is only a month since the tender closed." The option of gas producing countries negotiating for better price despite having floated tenders for sale is not uncommon, petroleum ministry officials said. India's offer is for off-taking all the gas available from the two blocks in addition to its 30 percent share. Till the entry of China and South Korea, India's chances of getting all the gas from the two blocks, in the process of being further explored, had seemed very bright. The 1,550 km pipeline project, which passes through Mizoram, may not be feasible unless India gets a long-term commitment for supply that is more than its 30 percent share, considering that infrastructure may run into billions of dollars, said officials. In the case of China, Myanmar has agreed to supply gas at its border once the deal has been finalised. Thailand has for long been Myanmar's single largest gas buyer, importing around $1 billion worth of gas annually from Yadana and Yetagun fields off the eastern coast. Facing increasing shortfall of gas supplies within the country, India has mounted several high-profile visits to Myanmar including President A.P.J. Abdul Kalam, to influence the military government. But nothing positive has emerged so far.
Source: IANS