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The Minister of Petroleum & Natural Gas and Panchayati Raj, Shri Mani Shankar Aiyar had wide ranging discussions here today with his counterpart from Myanmar Brigadier General Lun Thi on enhancing cooperation in the area of hydrocarbon sector. The two sides discussed evacuation of gas from Myanmar through the Myanmar-Bangladesh-India pipeline and other alternatives to access natural gas resources for Indian market. Other issues which figured in the talks include participation of Indian companies in the exploration and production activities in onshore and off-shore blocks in Myanmar, diesel export to Myanmar from Numaligarh Refinery, extending US$ 20 million credit for upgrading Thanlyin Refinery in Myanmar, GAIL’s proposal for setting up LPG extraction plant at Yetagun field etc. General Lun Thi extended invitation for Shri Aiyar to visit Yangon which was accepted. At the end of day long ministerial-delegation level talks agreed minutes were signed by two sides in the presence of the Petroleum Ministers of two countries.
The gist of discussions is summarized below:
Status of Myanmar-Bangladesh-India gas pipeline initiative: Both sides agreed that the best alternative of gas evacuation from Myanmar to India would be through Myanmar-Bangladesh-India pipeline. However, there has been some delay in taking further action on this initiative due to some outstanding bilateral issues between India and Bangladesh. The Government of India would continue to sort out the issue with Bangladesh.
Options of gas evacuation from Myanmar to India: Out of the various options, viz., onshore/offshore pipeline options (other than those passing through Bangladesh), CNG option and LNG option, the Techno-Commercial Working Committee (TCWC), set up in terms of the trilateral joint press statement issued in Yangon on 13th January 2005, would further examine the viability of following options:
Onshore pipeline through the Northeastern territory of India: Under this option, TCWC would consider two sub-options, viz., gas delivered at Sittwe and gas delivered at Myanmar-India border. Myanmar Energy Minister stated that the responsibility of gas seller would stop at the delivery point.
LNG option:
TCWC would meet in Yangon before the end of July 2005.
Participation of Indian companies in offshore/onshore E&P projects in Myanmar:
Onshore blocks: Myanmar Energy Minister stated that as per their policy, the onshore blocks are to be explored by MOGE. Minister (P&NG) conveyed the deep appreciation of the Government of India to the Myanmar Government for allowing the OIL led consortium to bid for onshore blocks RSF – 6 and RSF – 9. He explained that there was a common understanding arrived between the two Ministers in their meeting in Yangon in January 2005, before the Myanmar Government took the decision to exclusively earmark the onshore blocks for MOGE, and he would request the Myanmar Government to reconsider.
Offshore blocks: Myanmar Energy Minister stated that they are yet to allot M1, M8, A5, A6 and A7 offshore blocks. The representative of OVL stated that they had given a composite bid for M8 and M11 blocks. Since M11 block has already been allotted to some other party, M8 block on a standalone basis does not look very promising. In respect of other blocks, they feel that the data is inadequate. The Myanmar side mentioned that various companies from different countries have already submitted their offers in respect of these blocks. Minister (P&NG) directed that OVL should immediately open up their office in Yangon so as to facilitate close cooperation with the Myanmar authorities and quick decision-making in such matters. They should open up their temporary office by 8th July 2005. The permanent office to be established subsequently should represent all Indian public sector undertakings in the hydrocarbon sector. Necessary cooperation in this regard may be obtained from the Indian Embassy in Yangon.
Joint India-Myanmar regional geological studies: ONGC and MOGE geo-scientists have carried out regional geological studies in the bordering areas of both the countries. The integration of all the geo-scientific data is being done and ONGC will submit the joint regional study report by the end of July 2005. Minister (P&NG) stated that as soon as the study report is received, a copy of the same would be given to the Myanmar Ambassador in New Delhi for onward transmission to Yangon. It was agreed that both the Ministers would jointly visit the border areas covered in the study report in the last week of October 2005. The logistics for this visit would be worked out by the Indian side. The Myanmar Energy Minister stated that in case it turns out to be good study report, the Myanmar Government would consider offering the prospects in this area to the Indian side under production sharing contracts for exploitation of its hydrocarbon resources.
Loan of US$ 20 million to Myanmar for Thanlyin refinery upgradation: As a part of the overall package of hydrocarbon sector cooperation between the two countries, an extension of credit line of US $20 million to the Government of Myanmar for renovation of Thanlyin Refinery was under consideration of Government of India. The Government of India have approved this credit line on 5th July 2005. The Myanmar Energy Minister thanked the Government of India for extending this credit line.
Diesel exports from Numaligarh Refinery to Myanmar: It was agreed that the technical teams from both sides should expeditiously sort out the issues relating to specifications, delivery point and pricing and report to TCWC. The Myanmar side indicated that while, to begin with they need 12 TMTPA of diesel, the demand is likely to grow much more. It was agreed that TCWC would keep this growing potential in mind in considering all issues related to diesel exports from Numaligarh to Myanmar. On the issue of the Myanmar proposal to pay in Rupee terms for such imports, Minister (P&NG) stated that an early view in the matter would be taken by the Indian side by involving the Reserve Bank of India. Further, it may be examined whether the Rupee payment for diesel trade, as proposed by the Myanmar side, could be accounted for in the payments to be made by the Indian side for gas imports from Myanmar.
GAIL’s Proposal of LPG Extraction Plant at Yetagun field: The Indian side projected that assuming availability of 11.30 MMSCMD of gas for processing, it would be possible to put up a barge mounted LPG extraction plant with 256, 000 TPA capacity provided the gas price is same as the price of gas exports to Thailand and without any tax. The Myanmar side, while agreeing in principle to the proposal, stated that the availability of gas from this field would decline from year 2018 onwards and tax exemption could only be on export duty to be levied on LPG export. Therefore, it was agreed that the possibilities of gas supplies from the other fields in the area need to be explored in order to prolong the life of the proposed barge mounted LPG extraction project. It was agreed that GAIL would work out the details in consultation with the Myanmar side. TCWC would keep the proposal under review.
ONGC/GAIL training programme for Myanmar personnel: ONGC has already imparted training to two batches of MOGE executives in 2005. GAIL has imparted training to one batch of engineers from MOGE on gas applications. Training schedule for 2005-06 is being sent to MoE. TCWC will continue to monitor the mutual cooperation in training and joint studies.
The Myanmar Energy Minister stated that they are trying to get the assessment of gas reserves in A1 block done through a third party certification by the end of year 2005. As per their own estimation, A1 block has about 9 TCF gas, which may support 2 LNG trains totaling to 7 MMTPA LNG production. India needs to take an early view whether they would want to purchase this LNG. The Indian side expressed the view that as decided while discussing the agenda item “Options of gas evacuation from Myanmar to India”, the option of LNG import is to be further studied by TCWC in conjunction with the other option of importing gas through onland pipeline passing through the Northeastern territory of India.
All the issues mentioned in the preceding paragraphs will be discussed by the Experts Group set up under the India-Myanmar MoU of 11th January 2005. The next meeting of the Experts Group will be held in Yangon before the end of July 2005.
RCJ/kc / Myanmar / 6.7.2005
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