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India fears Myanmar may seek other markets for gas

Although the two nations are exploring the alternate pipeline route bypassing Bangladesh, the high cost and security issues remain a concern.

world Updated: Jan 11, 2006 16:00 IST

India fears that the continuing delay in finalising plans for a gas pipeline connecting Myanmar via Bangladesh despite a trilateral agreement may see Yangon seeking alternative markets for sale of its gas.

"If in the next two to three months we are not able to make a breakthrough then we may lose the project. We have already lost one whole year with Bangladesh still to come to a decision," petroleum ministry sources here said.

"Any further delay could see Myanmar finalising a deal for supply of liquefied natural gas (LNG) to South Korea, Thailand or Japan or alternatively explore pipeline gas supply to China, which is keen to get more gas to supplement its demand," an official said.

Although India and Myanmar are exploring the alternate pipeline route bypassing Bangladesh and entering the country through the northeast, the high cost and security issues remain a concern.

Further, petroleum ministry officials feel bypassing Bangladesh would be "a major failure in Indo-Bangladesh relations given that the three nations had last year agreed on making it a tri-nation project that would not only enable India to get gas supplies from Myanmar but also allow Bangladesh to transfer gas from surplus to deficit regions", a senior official said.

Given that general elections are likely to be held in Bangladesh early next year, it seems unlikely that any early decision on the pipeline would be forthcoming.

Houston-based consulting firm Ryder Scott Company has verified between 2.88 to 3.56 trillion cubic feet (TCF) of gas in Block A-1 in Myanmar's offshore Shwe field in which India holds 30 percent stake through its state-owned companies.

ONGC Videsh Ltd (OVL) holds 20 per cent stake and GAIL (India) Ltd another 10 per cent participating interest in this block operated by Daewoo International Corporation with 60 per cent stake and Korea Gas Corporation holding 10 per cent stake.

The consortium started the 2005-06 drilling campaign in December last year with Shwe Nilar-1 well near the Shwe field to add more gas volume in the Shwe area.

The Shwe Phyu field, another discovery in Block A-1, will be evaluate by three appraisal wells during the current drilling campaign.

The consortium is also set to start a drilling programme in Block A-3 with the first exploratory well Mya-1. OVL and GAIL together hold 30 percent stake in this block too, in the same pattern as in Block A-1.

Besides its share of gas from the two exploration blocks, India is looking at Myanmar to source more supplies once the proposed pipeline becomes operational.

First Published: Jan 11, 2006 16:00 IST