Govt Nod To ONGC And GAIL Stake In China Gas Pipeline (18-Feb-2010)
China is building a gas pipeline in Myanmar for which government permitted ONGC Videsh Ltd, the overseas investment arm of Oil and Natural Gas Corp (ONGC) and GAIL to pick 12.5 per cent stake in a pipeline and also allowed them to invest another $1billion in fields that will provide gas to be shipped to China through the pipeline.
ONGC Videsh Ltd got the approval from the Cabinet Committee on Economic Affairs (CCEA) headed by Prime Minister Manmohan Singh to invest $167.84 million in taking 8.35 per cent stake in the pipeline.
An official spokesperson said that GAIL will be taking the remaining stake of 4.17% by investing $83.88 million. The pipeline is being constructed by China National Petroleum Corp (CNPC) to transport gas found in block A-1 and A-3 off the Myanmar coast
The pipeline which is going to be build by CNPC will cost $2.01-billion and will be used for shipping the gas from blocks A-1 and A-3, where OVL and GAIL India hold 17 per cent and 8.5 per cent stakes respectively, to China.
The blocks from where gas will be generated will be sold to China for $7.72 per million British thermal unit at the landfall point in Myanmar. The block is currently operated by South Korea''s Daewoo which holds 51 per cent
Currently, Daewoo, OVL, GAIL and Korea Gas, which has 8.5 per cent stake, are investing $2.79 billion in three gas fields in Block A-1 and A-3 off the Myanmar coast and another $936.26 million in laying a separate under-sea pipeline to take the gas to the shore.
Moreover, an official said that CNPC had decided to offer 49.9 per cent stake to the consortium developing gas fields in blocks A-1 and A-3. In Block A-1 and A-3, South Korea''s Daewoo Corp holds 51 per cent stake in each of the block while OVL has 17 per cent stake. GAIL and Korea Gas Corp have 8.5 per cent each while the remaining 15 per cent is with Myanmar''s Myanma Oil and Gas Enterprise (MOGE).
Whereas the consortium which is developing the gas fields will invest $3.61 billion in the two blocks.
He said," The 49 per cent stake is being apportioned in the same ratio as individual stakes in Block A-1 and A-3".
The shareholding in the pipeline project would be CNPC - 50.9 per cent, MOGE- 7.37 per cent, Daewoo- 25.04 per cent, OVL - 8.35 per cent, GAIL and KOGAS-4.17 per cent each
He said the discovery of two gas field ,Shwe and Shwe Phyu in Block A-1 and Mya discovery in Block A-3 would be combined together to produce 500 million standard cubic feet per day of gas for 19 years while its life is estimated to be for 28 years.
First gas is anticipated in the first quarter of 2013.
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