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Myanmar to sell gas to China - India minister

NEW DELHI (Reuters) - Myanmar has picked PetroChina to sell gas to China via a pipeline from two blocks in which Indian firms have stakes, India’s junior oil minister said on Tuesday, dashing the hopes of bringing the gas to India.

In February, Myanmar decided to sell gas from its A1 and A3 offshore blocks to China, and in March it told the partners in the block, Dinsha Patel said in a written answer to a question in the Indian parliament.

India’s Oil and Natural Gas Corp. owns 20 percent of each block, while Indian gas transmission company GAIL (India) Ltd. has 10 percent of the two assets.

South Korea’s Daewoo International Corp. operates the two blocks with a 60 percent stake, and Korea Gas Corp. owns the remaining 10 percent.

“GAIL impressed upon the partners and Myanmar Government that GAIL’s pipeline offer was still the most competitive and offered optimum value for them due to proximity of India to these fields. However, Myanmar government stuck to their decision to sell the gas to China,” Patel said.

Despite the country’s political isolation and Western sanctions, Myanmar’s offshore natural gas fields have become a hotly contested commodity as neighbours seek stable, secure sources of cleaner fuel for their fast-growing economies.

Patel said on Tuesday the Myanmar government had signed a memorandum of understanding with India in March 2006 acknowledging GAIL as preferential buyer of gas from A1 and A3 blocks.

In August 2006, Myanmar invited bids for 15.8 million cubic metres a day of gas from the two offshore blocks through a pipeline, he said. GAIL submitted its bid.

“Subsequently, Myanmar government reviewed their decision to sell this gas through the pipeline route and invited bids for sale of 3.5 million tonnes per annum of liquefied natural gas. GAIL again submitted its bid,” Patel said.

India would continue to make efforts for import of gas from all possible sources including Myanmar to achieve energy security for the country, the minister said.