NEW DELHI – After many months of speculation, India has officially conceded defeat in its bid to import gas from two offshore blocks in the Bay of Bengal.
On August 14, India’s junior oil minister said the Myanmar government has picked PetroChina to sell gas to China via a pipeline from the A1 and A3 blocks in which Indian firms have stakes.

In February, the government decided to sell gas from the A1 and A3 offshore blocks to China, and in March it told the partners in the block, Dinsha Patel said in a written answer to a question in the Indian parliament.

India’s Oil and Natural Gas Corp. (ONGC) owns 20 percent of each the blocks off the Rakhine coast, while Indian gas transmission company GAIL (India) Ltd has 10pc of the two assets.

South Korea’s Daewoo International Corp. operates the two blocks with a 60pc stake, and Korea Gas Corp. owns the remaining 10pc.

“GAIL impressed upon the partners and Myanmar government that GAIL’s pipeline offer was still the most competitive and offered optimum value for them due to proximity of India to these fields. However, Myanmar government stuck to their decision to sell the gas to China,” Patel said.

Myanmar’s offshore natural gas fields have become a hotly contested commodity as neighbours seek stable, secure sources of cleaner fuel for their fast-growing economies.

Patel said on August 14 the Myanmar government had signed a memorandum of understanding with India in March 2006 acknowledging GAIL as preferential buyer of gas from A1 and A3 blocks.

In August 2006, Myanmar invited bids for 15.8 million cubic metres a day of gas from the two offshore blocks through a pipeline, he said. GAIL submitted its bid.

“Subsequently, Myanmar government reviewed their decision to sell this gas through the pipeline route and invited bids for sale of 3.5 million tonnes per annum of liquefied natural gas. GAIL again submitted its bid,” Patel said.

South Korea had initially been keen to pursue the LNG option and had proposed building an LNG plant close to the fields, which would have allowed the gas to be sold on spot markets worldwide.

Patel said India would continue to make efforts to import natural gas from all possible sources including Myanmar to achieve energy security for the country.
– Reuters