Seoul/New Delhi: China won the rights to natural gas from Myanmar’s biggest field, beating stakeholder India in the race for resources among the world’s two fastest growing economies.
Daewoo International Corp., the operator of the field, picked a Chinese firm as the preferred bidder to extract the gas, the Seoul-based firm said in a regulatory filing, without naming the possible buyer. State-owned Indian firms own 30% of the field, which holds about?7.7?trillion cubic ft of gas.
Gas commands a premium for fuel-hungry Asian nations as crude oil prices hover near $100 (Rs3,940) a barrel. India and China are competing for oil and gas to supply the world’s two most populous nations. The Korean firm is the operator of the A-1 and A-3 offshore blocks, in which it has a 60% stake. Korea Gas Corp. owns 10% of the areas, GAIL (India) Ltd holds 10% and Oil and Natural Gas Corp. Ltd (ONGC) owns 20%.
Energy consultant Gaffney, Cline and Associates certified that Myanmar’s A-1 and A-3 areas hold as much as 7.7 trillion cubic ft of gas.
“Gas from the field has to be sold and if Daewoo has chosen China, in principle, I see nothing wrong with it,” ONGC chairman R.S. Sharma said. “GAIL was dealing with the bit relating to getting the gas to India.”
China, India, Thailand, South Korea and Japan are competing for a share of Myanmar’s gas supply. The South-East Asian country had about 19 trillion cubic ft of reserves last year, BP Plc. said in its annual energy report.
Daewoo International is in talks to sell the gas to PetroChina Co. Ltd, Korea Economic Daily reported on 27 November, citing Daewoo International’s chief executive Kang Young Won. Daewoo and PetroChina are in discussion over the price and may reach an agreement soon, Kang said in an interview with the paper.
China, Thailand and India have submitted bids to buy the gas through pipelines, while South Korea and Japan are interested in buying the fuel as liquefied natural gas (LNG), Cho Sang Yeon, a spokesman at Daewoo International, had said on 21 March.
LNG is natural gas that has been chilled to liquid form, reducing it to one-six-hundredth of its original volume at minus 161 degrees Celsius, for transportation by ship to destinations not connected by pipeline. On arrival, it’s turned back into gas for distribution to power plants, factories and households.