Gail, OVL JV set to lap up huge gas find in Myanmar

Indications of large gas accumulations have come to light in the offshore block A-1 in Myanmar, where ONGC Videsh Limited (OVL) and Gail Ind...

Indications of large gas accumulations have come to light in the offshore block A-1 in Myanmar, where ONGC Videsh Limited (OVL) and Gail India Limited hold joint equity stakes with Daewoo International of Korea and the Korean Gas Company (KOGAS).

Senior petroleum ministry officials disclosed that Gail, in a recent communique to Petroleum Minister Ram Naik, has informed that the A-1 block in Myanmar has ‘in-place gas reserves of 32 trillion cubic feet (907 billion cubic meters) and recoverable gas reserves of 22 tcf (625 bcm). ‘Such huge quantum of gas reserves, if established through exploration, can sustain a peak production of 60 million standard cubic meters of gas per day (mmscmd) for a period of 20 years,’ says Gail in its letter.

Incidentally, the current level of consumption of natural gas in India is between 60-65 mmscmd. Three structural prospects and one lead have been identified from the interpretation of new and old seismic data in the A-1 block in Myanmar. The first prospect has been assigned success ratio of more than 42 per cent and potential recoverable gas reserves of 10 tcf. The well is expected to take two and a half months for completion. Officials said Gail has the rights to market 90 per cent of the gas production from this block including the shares of OVL and Daewoo International. Currently Gail is in talks with Kogas for marketing its 10 per cent share of gas, they added.

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“Gail is also studying the feasibility of laying a 550-600 km offshore pipeline from Block A-1 to India through the exclusive economic zone (EEZ) of Bangladesh and the nearest landfall point in India will be Haldia in West Bengal. However, as this pipeline would be within the EEZ of Bangladesh, the consent of the government of Bangladesh would be required for this,” officials said.

The other option, officials said, would be to lay a pipeline avoiding the Bangladesh EEZ limits but this would make the pipeline expensive due to increase in length and deep waters of up to 2,000 meters. Myanmar Foreign Minister U. Win Aung, is in India from January 19 to 24 and during his stay he is scheduled to meet Vice-President, Prime Minister, Finance Minister, Disinvestment Minister and Petroleum Minister.

According to officials, the government of Myanmar is supportive of developing gas trade with India and discoveries of huge gas reserves in Block A-1 will support a pipeline project for gas supplies to the Indian market. “India could thus provide a natural market for gas from A-1 block subject to negotiations of competitive gas prices with the government of Myanmar.”

The A-1 block in Myanmar extends over an area of 3,885 square meters off the Rakhine coast and is the westmost block of Myanmar, in closest proximity to India. Daewoo International holds a 60 per cent equity followed by OVL at 20 per cent and Gail and Kogas at 10 per cent each.

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