GAIL set to invest Rs 4,000 crore to cart Myanmar gas

GAIL India Ltd is planning to invest around Rs 4,000 crore to transport gas struck by an Indo-Korean consortium in offshore North West Myanmar to India over land.

Talking to Business Standard , GAIL India chairman Proshanto Banerjee said: "I expect commercial production to start in 2006-07. In the next 5-6 months, we will have to assess the availability of gas, the transport options and the route to take."

The company also has the option to transport the gas through a sub-sea pipeline. But this works out more expensive than an on-land route, Banerjee said.

"At the moment, an on-land route is the preferred option," Banerjee said. Though the final route is yet to be decided, the pipeline is likely to travel from north Myanmar to Mizoram and then to West Bengal.

What could also affect the final decision is that there are two more structures in the same block, which look promising.

"In six months, we will get to know their potential. Being in the same block, we hope these reserves will also be good," Banerjee said.

The Indo-Korean consortium comprises ONGC Videsh Ltd, GAIL India, Daewoo International and Korean Gas Corporation. Initial estimates suggest the gas reserves to be around 6 trillion cubic feet (tcf).

While 65 per cent of the production will go to Myanmar Oil & gas Enterprise, the remaining 35 per cent will be taken up by the consortium.

GAIL India has got into a marketing agreement with OVL and Daewoo to pick up their share of the gas. "Out of the possible gas reserves of 6 tcf, we are looking at around 2 tcf," Banerjee said.

GAIL India is also in discussion with Myanmar Oil & Gas Enterprise to lift the surplus gas after Myanmar's requirements have been met.

"We have participated in NELP blocks in the past, nut this is the first source of GAIL's own gas. To that extent, we are very happy," Banerjee added.