India loses out to China in gas deal

SEOUL: China won the rights to buy natural gas from Myanmar’s biggest field, beating stakeholder India in the race for resources among the world’s two-fastest growing major economies.

Daewoo International, the operator of the field, said it picked a Chinese company as the preferred bidder. State-owned Indian companies own 30% in the area, which holds as much as 7.7 trillion cubic feet of gas.

India has lost out to China in more than $10 billion of oil and gas assets in Nigeria, Kazakhstan and Canada in the last two years, depriving the resource-scarce nation as crude oil prices rose to a record. China’s planned construction of a pipeline underscored its commitment to win the latest contest.

“The Indians showed interest but they haven’t been so aggressive,” said Tony Regan, a consultant for US Nexant based in Singapore. “The Chinese were showing much more interest and they were looking at how to get it to China and they got a pre-approval from Beijing for a pipeline to China.”

China, India, Thailand, South Korea and Japan are competing for a share of Myanmar’s gas supply as discoveries increase. The Southeast Asian country had about 19 trillion cubic feet of reserves last year, BP Plc said in its annual energy report.

The gas will be transported via pipelines, Daewoo said in a regulatory filing in Seoul on Wednesday, without identifying the buyer. The Korean company is the operator of the A-1 and A-3 offshore blocks, in which it has a 60% stake. Korea Gas owns 10% of the areas, Gail India 10% and ONGC owns 20%.

“Gas from the field has to be sold and if Daewoo has chosen China, in principle, I see nothing wrong with it,” said ONGC chairman RS Sharma. “Gail was dealing with the bit relating to getting the gas to India.”