DAEWOO and its partners are negotiating with PetroChina for the sale of natural gas from the A-1 and A-3 blocks, located offshore in Rakhine State, said a senior official from Daewoo International.

“We are now discussing with the PetroChina to sell our gas to China. It is still under negation but we hope to reach an agreement within the next few months,” said Dr Su-Yeong Yang, managing director of Daewoo International Corporation (Myanmar E&P).

According to Dr Yang, the negotiations have centred on the price at which the gas from A-1 and A-3 offshore blocks, where Daewoo discovered giant natural gas reserves, will be sold.

Dr Yang said the decision to sell the gas to China was made by Myanmar’s government and the company supports that decision.

“We hope PetroChina accepts the price we have given them, otherwise we cannot sell our gas to China,” he said, adding that the company has alternative options available to it, including a Liquefied Natural Gas (LNG) plant.

He declined to mention what price the company has proposed to China.
But he was willing to talk shop about the cost of developing the gas fields, stating that Daewoo had invested more than US$3 billion in the project, with the aim to start producing gas commercially as soon as possible.

If and when agreement is reached, gas from the A-1 and A-3 blocks will be exported to China, probably via a pipeline for longer than 20 years.
He said the gas pipeline will bring socioeconomic development to the regions that it passes through.

The A-1 and A-3 gas fields are being developed by a consortium headed by South Korea’s Daewoo International Corporation, which has a 60 percent share in the venture.

India’s state-owned ONGC Videsh and GAIL (India) Limited hold a further 20pc and 10pc shares respectively, while the remaining 10pc is held by South Korea’s state-owned Korea Gas Corporation.

Reserves at the A-1and A-3 blocks are estimated at about 5 trillion cubic feet (TCF) but this number will be revised shortly following an independent third-party estimation.

Meanwhile, Dr Yang predicted that exploration activities and investment will increase in Myanmar’s oil and gas sector due to the high potential for finding of hydrocarbon reserves.

“We believe that our discovery in A-1 block triggered exploration activities both offshore and onshore in Myanmar,” he said.

“The exploration for the Bengal Fan has just started in Myanmar’s territory but there were already a few discoveries in the western part of the Bengal Fan offshore in India’s east.

“We expect that there is great potential for the gas resources offshore in Rakhine State and that is the reason why we acquired the AD-7 deepwater block, which is west of our A-1 block,” he said.

“I believe there will be more discoveries in the Rakhine area in the future.”