New Delhi: Gas firm GAIL (India) Ltd is looking at joining a consortium to lay a gas pipeline from Myanmar to China, its chairman said on Tuesday.
The 890km pipeline is expected to cost $1.5 billion (Rs7,305 crore) and GAIL’s decision to invest depends on issues such as return on investment and associate rights over the project, B.C. Tripathi told reporters after a shareholder meeting.
“The proposal (on laying the pipeline) has come to us and we are examining it,” Tripathi said.
GAIL is a minority partner in the A-1 and A-3 offshore blocks in Myanmar. Other partners in the blocks, operated by South Korea’s Daewoo International, are India’s ONGC, Myanmar Oil and Gas Enterprise, and Korea Gas Corp.
Daewoo and its partners will invest about $5.6 billion to develop the Myanmar gas fields as part of a 30-year natural gas supply deal with China, a group member had said in August. Gas supply from the blocks is expected to start in the first half of 2013, with initial output from the first phase pegged at 10 million standard cubic metres a day (mscmd). “Finally it will be ramped up to 16 mscmd,” Tripathi said.
GAIL’s head of finance, R.K. Goel, said China Gas Holdings could also join the consortium.
“We have already taken approval from the Myanmar government and the existing consortium to permit our alliance to associate in the joint venture,” Goel said.
Tripathi said GAIL was going slow with its planned overseas petrochemical plant because of the global economic slowdown and several domestic projects the firm already had.
“The economic meltdown has taken place, we still want to do it, but it is on the back foot...we still have lots of projects in hand here also,” he said, adding that GAIL was building new pipelines worth Rs30,000 crore.
GAIL has signed a preliminary pact with India’s Reliance Industries Ltd to set up a petrochemical plant overseas, but is open to tie-ups with other firms.