India losing grip on Myanmar gas to China

Sources say Myanmar is eager to convert the gas into LNG and export it to China and other East Asian countries, report Deepak Joshi & Gaurav Choudhury.

India is concerned over the rise in tempo of China’s acquisition of oil and gas assets in Myanmar as this could “affect Indian plans to exploit Myanmar’s energy reserves”.

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Early this year, China National Petroleum Corporation (CNPC) was awarded three deep-sea blocks by Myanmar off its western Rakhine coast, adjacent to the Indian border. According to observers who did not wish to be identified, “The award of production sharing contracts to CNPC was the result of recent opposition by China to a US-led move in the UN to restore basic standards of democracy and human rights in Myanmar.”

With the acquisition of these three blocks, Chinese oil companies now have production contracts in six blocks off the Myanmar coast. The other three are with China National Offshore Oil Corporation (CNOOC). Besides these, Chinese companies have contracts in five on-shore blocks.

Myanmar is reported to have postponed a decision on who it will sell the gas produced from another two blocks off the Rakhine coast. Sources said the Myanmar government was eager to explore options like converting the gas into liquefied natural gas (LNG) and exporting it to China and other East Asian countries.

India's ONGC Videsh Ltd and GAIL have a 30 per cent stake in these two blocks and South Korea's Daewoo is the operator with a 60 per cent stake. South Korea's Kogas has the remaining 10 per cent interest.

Hydrocarbon reserves in one block in which ONGC Videsh and GAIL have an interest are estimated to be in the vicinity of 4.8 trillion cubic feet. Reserves in the other one are not yet known and the Myanmar government is trying to figure them out. Some numbers should be available by May.