GAIL may buy stake in China’s CNPC

State-run gas utility GAIL India Ltd may take a stake in the USD 1.95-billion gas pipeline.

State-run gas utility GAIL India Ltd may take a stake in the USD 1.95-billion gas pipeline that China is building for ferrying natural gas found off the Myanmar coast.

“We have received a proposal for joining the project. We are examining the prospects,” GAIL Chairman and Managing Director B C Tripathi told reporters.

China National Petroleum Corp (CNPC) is laying a 870-km pipeline in Myanmar to transport gas found in blocks A-1 and A-3 to mainland China.

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CNPC has offered 49.9 per cent stake to the consortium developing gas fields in blocks A-1 and A-3.

South Korea’s Daewoo Corp holds 51 per cent stake each in block A-1 and A-3 while ONGC Videsh Ltd has 17 per cent interest. GAIL and Korea Gas Corp have 8.5 per cent each.

Myanmar’s state-run Myanma Oil and Gas Enterprise (MOGE) has the remaining 15 per cent.

Tripathi said the proposal that has come from Daewoo was inclined to participate in the 40-inch pipeline.

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If all the consortium members decide to participate,the shareholding in the pipeline project would be CNPC- 50.9 per cent,MOGE- 7.37 per cent,Daewoo- 25.04 per cent,OVL- 8.35 per cent,GAIL and KOGAS- 4.17 per cent each.

Gas from A-1 and A-3 will be sold to China for USD 7.72 per million British thermal unit at the landfall point in Myanmar. Tripathi said work on the pipeline is likely to begin “sometime next year”.