The ambitious plan of ONGC Videsh Limited (OVL) and GAIL (India) to take 12.5 per cent stake in the $2.01 billion (around Rs. 9,300 crore) gas pipeline being built by China in Myanmar to transport natural gas found in the Bay of Bengal will be put up before the Union Cabinet shortly for approval.

Officials said the matter was likely to be considered by the Cabinet Committee on Economic Affairs (CCEA) headed by the Prime Minister, Manmohan Singh, soon to consider OVL and GAIL to invest $251.2 million (around Rs. 1,170 crore) in the 870-km pipeline China National Petroleum Corporation (CNPC) is laying in Myanmar to supply gas found in offshore blocks A-1 and A-3 to mainland China.

ONGC has agreed to lend about Rs. 4,000 crore to OVL to fund its share of cost of developing the gas fields in A-1 and A-3 blocks and the pipeline to China. CNPC is learnt to have 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 OVL has 17 per cent stake. GAIL and Korea Gas Corporation have 8.5 per cent each while the remaining 15 per cent is with Myanmar’s Myanma Oil and Gas Enterprise (MOGE). The consortium is investing $3.61 billion in bringing to production gas fields in the two blocks.

Officials said Daewoo too was inclined to participate in the pipeline and final shareholding in the project would be CNPC 50.9 per cent, MOGE 7.37 per cent, Daewoo 25.04 per cent, OVL 8.35 per cent, and GAIL and KOGAS 4.17 per cent each. Gas from A-1 and A-3 blocks would be sold to China for $7.72 per million British thermal unit (mBtu) at the landfall point in Myanmar.

Sources said Shwe and Shwe Phyu gas fields in Block A-1 and Mya discovery in Block A-3 would be tied together to produce a plateau of 500 million standard cubic feet a day of gas for 19 years.

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