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Myanmar offers well-head gas at $2.52/mmbtu

Anupama Airy
From The Financial Express, India
August 18, 2005
link to this article.

The Myanmar government has indicated a well-head price of $2.52 per million metric british thermal unit (mmbtu) for gas exports to India. Depending on how it is transported - through a pipeline or the LNG/CNG route - there will be additional processing and transportation costs which will be built into the well-head gas price.

The price offered by Myanmar is in line with what it is selling gas to Thailand at. Sources said negotiations will now be carried out with Myanmar considering that the gas being imported to Thailand is rich whereas the block A-1 gas, where both ONGC Videsh Limited (OVL) and GAIL (India) Limited have 30% equity, is lean. "Appropriate reduction would therefore be sought as per the prevailing international norms," sources said.

India will also seek a volume discount while negotiating the final price of gas because the volume of gas exports to Thailand is 10 million metric standard cubic meters per day (mmscmd) whereas off-take from A1 block (including the Myanmar government's share) is between 22-28 mmscmd.

Three options are being explored to import gas from Myanmar - the north-east pipeline route, sea route to bring the gas in compressed form or the LNG mode.

GAIL has been asked to give the cost details of all these three options based on feasibility studies carried out by consultants Snamprogetti and Enersea.

The LNG option, say sources, is viable only if sufficient quantities are available in Myanmar for exports to India. Moreover, Daewoo, which operates the A-1 block, is unlikely to sell its share of gas for marketing in India and is likely to take it to Korea.

Sources said the petroleum ministry had already asked GAIL to study the feasibility of bringing gas from Myanmar through the CNG route, as proposed by international company Enersea.

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