Myanmar gas find highlights pipeline talks

April 12, 2005
A new gas discovery on Block A-1 off Myanmar highlights trilateral negotiations over a pipeline proposed for the region.

Eric Watkins
Senior Correspondent

LOS ANGELES, Apr. 12 -- A new gas discovery on Block A-1 off Myanmar highlights trilateral negotiations over a pipeline proposed for the region.

Myanmar's Ministry of Energy announced the Shwe Phyu discovery off the country's Western Rakhine coast.

It's the second field to be found on Block A-1. Officials from South Korea's Daewoo International, operator of the concession, earlier said they were uncertain of the size of the discovery.

Testing is under way, Lee Jae-deok, a Daewoo official, told the Korea Times Mar. 30. "It is too early to say whether it is worthy to develop. We may hit another jackpot there, but nobody knows," Lee said.

As much as 6 tcf of gas has been discovered in the nearby Shwe field on Block A-1.

Indian Oil Minister Mani Shanka Aiyar said Mar. 10 that plans call for the drilling of eight more wells on the block. India, with two companies in the A-1 consortium, plans to buy the gas from Myanmar.

In order to transport the gas, a gas pipeline running through Myanmar, Bangladesh, and India is under negotiation (OGJ Online, Jan. 18, 2005).

The $1 billion pipeline project is designed to carry Block A-1 gas as well as gas expected from Block A-3 off Myanmar's coast to India's West Bengal state through Bangladesh.

Myanmar has reportedly completed the draft of the memorandum, which was prepared by a working committee of experts from the three countries in February. But Bangladesh has decided not to host a meeting on Apr. 20-21 for its signing.

Bangladeshi authorities say they are not ready for the meeting as their three conditions put to India remain outstanding.

Dhaka wants Delhi to provide transit facilities to import hydroelectricity from Nepal and Bhutan, give scope for Bangladesh to trade with the two countries, and reduce the trade imbalance between Bangladesh and India.

Indian officials are said to be considering other ways of transporting the natural gas from Myanmar if talks with Bangladesh break down.

According to official estimates, Myanmar has a total of 87 tcf in gas reserves and 3.2 billion bbl of recoverable crude oil.

Myanmar's Central Statistical Organization statistics show that the country produced 9.9 bcm of gas and 7.16 million bbl of crude oil in fiscal 2003-04.

Operations at A-1 have been undertaken by Daewoo International Corp. 60%, along with South Korea Gas Corp. 10%, ONGC Videsh Ltd. of India 20%, and Gas Authority of India Ltd. 10%.