Date:28/07/2005 URL: http://www.thehindubusinessline.com/2005/07/28/stories/2005072802350500.htm

Back Gas from Myanmar: Daewoo-led group plans sub-sea pipeline

Richa Mishra

New Delhi , July 27

A consortium led by Daewoo, in which Oil and Natural Gas Corporation has 20 per cent stake, is looking to construct a sub-sea pipeline and get two liquefied natural gas (LNG) trains for transportation of the gas found in the offshore block A1 in Myanmar.

The Daewoo-ONGC-GAIL (India) Ltd-Korea Gas Corp (Kogas) consortium recently struck 19 trillion cubic feet (TCF) of natural gas.

According to an ONGC source, this is the one of the largest gas discoveries in the region. The 19 TCF is recoverable reserves, he said.

The proposed pipeline is to be built from Sittway, Myanmar to Haldia in West Bengal. This sub-sea pipeline is expected to be 925 km long, which is also the shortest route to bring in the gas, the source said. The onshore pipeline requirement will be a little over 250 km.

On whether ONGC would go alone in setting up a pipeline or the consortium would participate, the source said ONGC might go alone, depending on the feasibility of the project.

On the need to bring the gas to the eastern region of the country, the source said, while the western region is already getting enough gas from several places, the East was still gas starved.

Hence, there is a good demand for the product. Besides, Haldia is an important destination as it houses the only petrochemical unit in the East and also has an Indian Oil refinery.

The second plan is to get two LNGtrains, which might cost Rs 3,500 crore each.

On the total cost involved in building a sub-sea pipeline, the source said that, including a gas extraction unit, the project may cost over Rs 2,000 crore.

In fact, the payback time will be less as Haldia has already got the infrastructure ready and there is sufficient demand for the product, he added. It may take five years to complete the project.

The third option is governed by a political decision - that of setting up an onshore pipeline through Bangladesh.

Daewoo, which is the operator of the block with 60 per cent, began exploration operations in November 2003. The block is estimated to hold 13.4 - 47.3 TCF of natural gas.

In the consortium, ONGC holds 20 per cent, while GAIL and Kogas hold 10 per cent each. The block was awarded to Daewoo in August 2000.