Burma’s military regime has confirmed an agreement in mid August to sell Shwe gas (Arakan’s A-1 and A-3  offshore  blocks)  to  China, according to Burma’s senior Energy Ministry official. “Yes, we have decided to sell the gas from A-1 and A-3 to China and details are under negotiation. Once we reach an agreement, we will go ahead,” the official, who asked not to be named, told Reuters. “If everything goes well, the gas from these offshore blocks will be sold to China through a pipeline,” he added, refusing to give further details.

The comments were the first confirmation from the Burma Junta. In April this year, Indian media reported that Burma had signed an MOU with China’s Petro China Company on March 14 to export Shwe gas by a 2,380 km inland pipeline worth US$ 1.04 billion. The pipeline would travel to China’s Kunming, the capital of Yunnan province from western Burma’s Arakan state through central Burma. In return, China will provide the Burmese regime an annual transit fee of US$ 150 million for 30 years for the pipeline’s 990-km stretch in Burma. According  to  assessments  by  the  U.S.-based international certification agency GCA, the A-1 and A-3 fields off the Arakan coast have proven to contain reserves of 5.7 to 10 trillion cubic feet with up to 8.6 TCF recoverable. Of the expected production of 600 million standard cubic feet of gas a day from the two blocks, Burma has decided to export 560 mscfd to China. South Korea ‘s Daewoo International Corp. , which had proposed building an LNG plant in Rakhine, has a 60 percent stake in the blocks.
 

Korea Gas Corporation has 10 percent, India’s Oil and Natural Gas Corporation 20 percent and Indian natural gas utility GAIL has the other 10 percent.

 

Three energy hungry neighbors, India, China and Thailand, have been bidding to buy the gas from A-1 and A-3 through pipelines.

 

Burma has at least 90 TCF of gas reserves and 3.2 billion barrels of recoverable crude oil reserves in 19 onshore and three major offshore fields. Altogether, 25 offshore blocks are under exploration, 12 of them in the Gulf of Martaban, six off the Tanintharyi coast and seven off the Rakhine coast.

 

Companies from Australia, Britain, Canada, China, Indonesia, India, Malaysia, Russia, South Korea, and Thailand have reached agreements with the government on exploration for gas and oil.

 

The SHWE Bulletin Volume 2, Issue 12