China Business

Jan 12, 2006

Myanmar stiffs India on gas, prefers China

NEW DELHI - In a major blow to India's effort to secure its energy needs through transnational pipelines, Myanmar has refused to supply natural gas to New Delhi and instead preferred doing business with China.

After beating Indian firms in overseas oil field acquisitions on three occasions in the last five months, Hong Kong-listed PetroChina has inked an agreement to purchase gas from A1 Block Block in Bay of Bengal.

"Ajay Tyagi, Joint Secretary (Gas), Ministry of Petroleum and Natural Gas had to cut short his trip and return back after Myanmarese authorities said they had tied-up gas sales with China," an industry official said. India has been pursuing gas

imports from Iran, Myanmar and Turkmenistan via transnational gas pipelines to meet growing energy needs, as domestic production barely meets half of its requirements.

Sources said Tyagi, who returned from Yangon on January 10, was informed that the Myanmar Energy Ministry signed a memorandum of understanding (MoU) with PetroChina on December 7 for the sale of 6.5 trillion cubic feet of gas from its Block A-1 reserve over 30 years. No one from the Petroleum Ministry was immediately available for comment.

The A-1 block has South Korea's Daewoo as the operator and India's ONGC Videsh Ltd (20%) and GAIL (10%) as its partners. India had proposed to build a US$1 billion 290-km trunk line from the west coast of Myanmar to West Bengal, via Bangladesh, for importing gas from the A-1 block and possible reserves in the adjacent A-3 block. OVL and GAIL hold a 30% stake in the A-3 block as well.

(Asia Pulse/PTI)

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