GAIL proposal deflates plan to import gas from Iran

The import of natural gas from Iran and Turkmenistan via Pakistan has received a setback with GAIL announcing that it would put up a pipeline to bring the gas from the "world-class giant gas field" discovered in Myanmar by an Indo-Korean consortium.

Though, because of geopolitical reasons, India has always been keen on importing gas from Myanmar rather than Iran or Turkmenistan through an onland pipeline passing through Pakistan, the inadequate availability of exportable gas in that country has so far been a stumbling block in progressing with the proposal.

While Myanmar has surplus gas for exports, it has kept aside a part of its reserves for supply to Thailand. Even as India had been pressing for at least a 25-year contact for gas supply to make any pipeline economically viable, Myanmar wanted a shorter contract in view of the limited availability of exportable gas.

Now that the consortium, comprising ONGC Videsh Ltd, GAIL India Ltd, Daewoo International Corporation and Korea Gas Corporation, has discovered up to 6 trilling cubic feet (tcf) of gas and hopes to find another seven to 12 tcf of gas in the same area, the question mark over the availability seems largely over.

Since the two Indian companies in the consortium jointly hold 30 per cent of the equity in the block where gas has been discovered, it is being felt in official circles here that the consortium would have no objection in signing a 25-year contract with India on commercial terms.

The discovery may also make Bangladesh take a faster decision on exporting its gas to India. This gas was discovered by the US oil giant Unocal which has been pressing the Bangladesh government to sell this gas to India.

Dacca, however, has been dragging its feet over the issue and saying it could consider export of gas to India only after it is satisfied that it has adequate reserves to meet the country's requirement for another 50 years. India has been facing huge shortage of natural gas.

As against the total allocation of 119 million metric standard cubic metres per day (mmscmd) of gas, the supplies are only of the order of 65 mmscmd.

Around 40 per cent of the gas is supplied to the power sector, 34 per cent to fertiliser, 5 per cent to sponge iron and the balance goes to other sectors.