Daewoo could sabotage Myanmar gas import plans

Vol 9, PW 12 (22 Sep 05) People & Policy
     

Daewoo has the potential to sabotage Indian plans to import gas from Myanmar.

As operator of blocks A-1 and A-3, the South Korean industrial giant has reasons of its own to ensure that gas heads east from Myanmar and not west to India. This was not lost on the visiting Indian delegation at the end of last month.

We understand the Indian team met Daewoos country head in Myanmar on 30th August, during which he expressed doubts about beginning commercial gas production from block A-1 by 2009. During the meeting, Daewoo told Indian officials that next month it planned to begin the process of third party certification of block A-1 reserves, the results of which would only be known by December 2005.

Daewoo said it also plans to appoint consultants next month to study several gas evacuation options from A-1 and that their report would only be ready by April 2006. Worryingly for India, Daewoo said its consultants would also study the option of exporting gas by pipeline to Thailand.

GAIL representative Rajiv Khanna is believed to have offered to share reports by GAILs own consultants on the gas evacuation options, so that theres no duplication of efforts. Daewoo sought information regarding the scope of GAILs studies and agreed to use these inputs in its own studies if there was a match.

During subsequent meetings, the Indian team learnt that Daewoo might have a vested interest in delaying commercial gas production from A-1 so that they could pursue the LNG option. Luckily for India, Myanmar officials have expressed doubts about the viability of the LNG option, especially since it would defeat its objective of selling A-1 gas as early as possible.