ONGC mulls stake in Burmese pipeline

ONGC Videsh may pick up a stake in an onshore pipeline China National Petroleum Corporation will construct to transport gas from Daewoo International’s Blocks A-1 and A-3 to China.

CNPC has offered a 49.9% stake in the 870-kilometre, 40-inch pipeline project to the Daewoo International-led consortium developing the gas fields in the two blocks, the Press Trust of India reported citing sources.

Since Daewoo was inclined to participate in the pipeline project, the board of ONGC Videsh has also approved taking stake in the project, according to the same sources.

South Korea’s Daewoo International will retain a 51% stake in Blocks A-1 and A-3 if Burma’s state-run Myanma Oil and Gas Enterprise (MOGE) exercise the right to 15% interest in the two blocks. ONGC Videsh will hold 20%, while Gail and Kogas will each retain 8.5%.

The proposed interest split will see Daewoo picking up 25.04% of the pipeline project and ONGC Videsh a 8.35% stake. CNPC will remain as the major shareholder. The remaining interest will be split among Myanma Oil and Gas Enterprise (MOGE) (7.37%), Gail (4.17%) and Kogas (4.17%).

Gas will be sold to China for $7.72 per million British thermal unit at the landfall point in Burma.

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