India sticks to first price offer for Myanmar gas

New Delhi, November 26:

Keen to source gas from Myanmar, India has urged Yangon to support plans for a trans-border pipeline through the rugged northeast and accept New Delhi’s first price offer. India

faces stiff competition from China, Thailand and South Korea for gas supplies from Myanmar, which feels that the bids from the four countries to its tender are below expectations.

The countries have been asked to revise their initial offers, but India says its offer remains the best, petroleum ministry sources said.

“We think we have given the best price offer for gas at their well head. We have urged them to re-look our offer and the value it will bring for both countries,” a senior petroleum ministry official said.

India’s state-owned ONGC Videsh and GAIL (India) Ltd hold 30 per cent stake in two offshore exploration blocks — A-1 and adjacent A-3 — in Myanmar. The Indian offer is for taking all the gas available from the two blocks. “Since Myanmar is also looking at the liquefied natural gas (LNG) option offered by South Korea, which does not have an overland link with Myanmar, we have reiterated that our pipeline option is very viable and also why it is a win-win for both countries,” the official said.

Till the entry of China and South Korea, India’s chances of getting all the gas from the two exploration blocks seemed very bright. The blocks are being further explored, GAIL, designated to handle the gas purchase and marketing, had put in a bid in September to a tender floated by Myanmar for gas sale from the blocks, which are together estimated to hold 5.7-8.6 trillion cubic feet (TCF) of gas reserves.

The expected production from the blocks is estimated to be around 16-18 million standard cubic metres per day (MMSCMD) and slated to begin in 2009.

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 LNG.

In the case of China too, Myanmar has agreed to supply gas at the border once the deal is finalised. Thailand has for long been Myanmar’s single largest gas buyer, importing around $1 billion worth of it annually from Yadana and Yetagun fields off the east coast.

“Unless India gets long-term commitment for more gas supply than its 30 per cent share, the 1,550-km-pipeline project from Myanmar bypassing Bangladesh may not be very feasible,” said the official.

With political and strategic reasons expected to influence the final deal, India is using diplomatic channels to sway the decision in its favour.

Several high-profile visits to Myanmar have been planned, including by president A P J Abdul Kalam.

There is considerable optimism that the Myanmar-India pipeline may be the first of the three trans-national pipelines India is interested in to come into being. The others are the Iran-Pakistan-India and Tajikistan-Afghanistan-Pakistan-India pipelines.