NEW DELHI: In a setback to India's attempts to enter into energy tie-ups with its neighbours to achieve total energy security, Myanmar has turned down a proposal to export gas to India, and instead, decided to business with China.

"Myanmar has informed that it wants to lay a pipeline to China to sell natural gas found in its offshore area. This was conveyed to the Indian delegation during its visit to Myanmar last week. The delegation comprised ONGC Videsh Limited Managing Director R.S Batolia and a senior official of Gas Authority of India Limited (GAIL). The delegation was informed that Myanmar wants to export gas from discoveries made in offshore Block A-1 and potential reserves in Block A-3 block to China," a senior official said on Wednesday.

ONGC Videsh Ltd and GAIL have 30 per cent stake in A-1 and A-3 blocks, where South Korea's Daewoo is the main operator with 60 per cent interest. The remaining 10 per cent is with KoGas of South Korea.

India has been seeking natural gas from Myanmar, Iran and Turkmenistan to supplement its falling domestic production that barely meets half the current demand.

"China matched India's offer very aggressively and they made every effort to ensure that this gas project is wrapped up. We lacked that kind of aggressive strategy and also suffered from delays in decision-making," the official said.

GAIL proposed a 1,573-km pipeline from Myanmar through Mizoram, Assam and West Bengal to Gaya in Bihar to transport gas from A-1 and A-3. China and Thailand too submitted proposals. At that time, Myanmar said the volumes in A-1 were not sufficient to support a pipeline and called for bids for selling the gas in liquefied form.

GAIL bid $5 per million British thermal unit for 3.5 million tonnes of LNG, which was lower than Marubeni of Japan and KoGas. "The Myanmar Government told us that a review of the export option would be taken in May this year when appraisal of gas reserves in A-3 would come. However, suddenly they called us and said a decision had been taken to export gas to China," the official said.

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