Myanmar reserves higher than expected, pipeline negotiations to begin soon

Shwe
11 August 2006

South Korea's Daewoo International has said that certified reserves from Myanmar's A-1 and A-3 blocks were higher than initially expected, with negotiations to sell the gas and develop a pipeline to either India, China or Thailand set to begin later this year.

The three gas fields in Myanmar's A-1 and A-3 blocks had proven reserves between 5.7 and 10.0 Tcf, with up to 8.6 Tcf believed to be recoverable.

Daewoo, which operates and owns 60 per cent of the offshore wells, one of the biggest undeveloped natural gas fields in Asia, said it would start marketing the gas later this year and sign sales contracts by the first half of 2007. The company said it expected gas production to start within three years after the contracts were signed.

"We will start negotiations to sell gas to India, China and Thailand in the second half of 2006. The company will also discuss LNG sales to South Korea, Japan and Taiwan," the company said.

Late last month, Thailand signalled its interest in procuring exclusive rights to Myanmar's northwestern natural gas reserves.

Myanmar has signed energy cooperation pacts with India and China, both trying to get an exclusive rights deal for gas in the A-1 block since last year and feasibility studies have been carried out for transporting gas to both countries.

Daewoo said it had acquired certifications for the Shwe and Shwe Phyu structures in Myanmar's A-1 block and Mya structure in A-3 block.

The certifications show that the Shwe structure has between 3.4 and 5.4 Tcf of proven gas reserves, higher than 2.9 - 3.6 Tcf certified in December. The field has between 2.9 and 4.7 Tcf recoverable.

The smaller Shwe Phyu structure has between 0.5 abd1.2 Tcf of proven reserves with 0.4-0.9 Tcf recoverable, while the Mya structure inside A-3 block has between 1.8 and 3.4 Tcf of proven reserves with 4.8 - 8.6 Tcf recoverable.

The entire A-1 block, which also contains the Shwe Nilar field, has been estimated to hold between 11.3 and 19.1 Tcf natural gas.