Wednesday, January 11 2006 10:04 Hrs (IST) - World Time -

New Delhi: In a major blow to India's effort to secure its energy needs through transnational pipelines, Myanmar has refused to supply natural gas to New Delhi and instead preferred doing business with China.

After beating Indian firms in overseas oil field acquisitions on three occasions in the last five months, Hong Kong-listed PetroChina has inked an agreement to purchase gas from A1 Block Block in Bay of Bengal.

"Ajay Tyagi, Joint Secretary (Gas), Ministry of Petroleum and Natural Gas had to cut short his trip and return back after Myanmarese authorities said they had tied-up gas sales with China," an industry official said.

India has been pursuing gas imports from Iran, Myanmar and Turkmenistan via transnational gas pipelines to meet the growing energy needs as domestic production barely meets half of its requirement.

Sources said Tyagi, who returned from Yangon yesterday (Jan 10,2006), was informed that Myanmar Energy Ministry signed an MoU with PetroChina on December 7 for sale of 6.5 trillion cubic feet of gas from Block A-1 reserve over 30 years.

No one from Petroleum Ministry was immediately available for comments.

A-1 block has South Korea's Daewoo as the operator and India's ONGC Videsh Ltd (20 per cent) and GAIL (10 per cent) as its partners.

India had proposed to build a one-billion dollar 290-km trunk line from west coast of Myanmar to West Bengal via Bangladesh for importing gas from the A-1 block and possible reserves in the adjacent A-3 block. OVL and GAIL hold 30 per cent stake in A-3 block as well.

New Delhi had also planned to use the Myanmar-Bangladesh-India pipeline to bring stranded gas in the North-East to consumption centres.

Sources said Vice Chairman of PetroChina and Ministry of Energy (Myanmar) signed an agreement, under which the Ministry agreed to sell 6.5 tcf from A-1 Block (Rakhine Coastline) reserve through overland pipeline to Kunming (China) for a period of 30 years.

Commercial production from A-1 block, home to Shwe field which alone has been assessed by Houston-based consulting firm Ryder Scott Co to contain 2.88 trillion cubic feet to 3.56 trillion cubic feet inplace volumes, was expected to commence by 2009.

Block A-1 entered the third extension period last month, which is likely to be over in October 2006, with a work programme of drilling of six appraisal/exploratory wells. The drilling campaign is already under way.