ONGC, GAIL eye 12.5% stake in Chinese gas pipeline

30 Dec 2009 Evaluate

State-run Oil and Natural Gas Corporation (ONGC) and GAIL India plans to take 12.5 per cent stake in the $2.01 billion (around Rs 9,300 crore) gas pipeline that China is building in Myanmar to transport natural gas found in the Bay of Bengal.   

 

Sources said the Cabinet Committee on Economic Affairs is likely to soon consider a proposal allowing ONGC Videsh, the overseas arm of the state explorer, and GAIL to invest $251.2 million (around Rs 1,170 crore) in the 870-km pipeline China National Petroleum Corp (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. Sources said that CNPC has 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 Corp 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.

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