Gail to Acquire Myanmar's Stake in A-1 Block

Myanmar's ministry of energy has decided to sell its share of gas in the recently discovered A-1 gas block to Indian public sector gas major Gail. A preliminary letter of intent has been sent to the company, appointing Gail as the preferential buyer subject to some conditions, according to company officials.

The partners in the block are Daewoo (with 60%), ONGC Videsh (with 20%), Gail (10%) and Kogas (10%). However, 65% of the total gas find will accrue to the government of Myanmar , according to the production sharing contract signed earlier and Gail plans to bring this gas to eastern India through pipelines.

The government is selling 10% in Gail in an issue slated to hit the market on February 27.

A team from Gail, which visited Myanmar last week, held discussions with the energy ministry and the Myanmar Oil & Gas Enterprise (MOGE) for transporting the gas produced in Block A-1 and its marketing in India.

The team has offered to undertake gas market study for developing gas distribution infrastructure in Myanmar for industrial, commercial, residential and transport use, the sources said.

The A-1 block has successfully tested gas in the drilling of first well with anticipated reserves of up to six TCF in one prospect. Seismic survey and appraisal well drilling is planned shortly to delineate the reservoir, the sources added.

Three more prospects are to be drilled and tested. Gail was also offered exploration and production stake in the nearby exploration blocks.

Both sides are also considering to have a JV for setting up a LPG Plant at Yetagun Gas field in Myanmar , it is learned.

About 13 MMSCMD (million metric standard cubic meters per day) rich gas is available from Yetagun Gas Field for extraction of higher hydrocarbons. LPG produced can be exported outside Myanmar.

The feasibility for the LPG recovery project and alternatives of putting up the plant Offshore or Onshore are being studied.

Both the sides have agreed for working level meetings to discuss the site conditions, collect geographic and oceanographic data and other essential details for conducting the detailed feasibility study.

Myanmar government has also sought Gail's assistance for carrying out feasibility to set up a Pilot Petrochemical Plant having capacity of 50,000 TPA ethylene based on around 500 TPD condensate available from their Yetagun field.