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Thursday, February 18, 2010

Govt allows ONGC, GAIL to pick stake in China gas pipeline

The government today permitted ONGC and GAIL to pick 12.5 per cent stake in a pipeline that China is building in Myanmar, and allowed them to invest another $1billion in fields that will provide gas to be shipped to China through the pipeline.

The Cabinet Committee on Economic Affairs (CCEA) headed by Prime Minister Manmohan Singh allowed ONGC Videsh Ltd, the overseas investment arm of Oil and Natural Gas Corp (ONGC), to invest $167.84 million in taking 8.35 per cent stake in the pipeline.

GAIL will invest $83.88 million for taking 4.17 per cent stake in the pipeline being constructed by China National Petroleum Corp (CNPC) to transport gas found in block A-1 and A-3 off the Myanmar coast, an official spokesperson said.

CNPC is building the $2.01-billion pipeline to ship gas from blocks A-1 and A-3, where OVL and GAIL India hold 17 per cent and 8.5 per cent stakes respectively, to China.

Gas from the blocks would be sold to China for $7.72 per million British thermal unit at the landfall point in Myanmar.

The block is operated by South Korea's Daewoo which holds 51 per cent.

Daewoo, OVL, GAIL and Korea Gas, which has 8.5 per cent stake, are investing $2.79 billion in three gas fields in Block A-1 and A-3 off the Myanmar coast and another $936.26 million in laying a separate under-sea pipeline to take the gas to the shore.

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