A consortium led by South Korea's Daewoo International will invest about $5.6 billion to develop Myanmar gas fields as part of a 30-year natural gas supply deal with China, a group member said yesterday.
The investment comes just a week after China signed a $41 billion liquefied natural gas import deal with Australia.
The Myanmar gas development plan will allow the consortium to supply natural gas to China's top oil and gas firm, China National Petroleum Corp (CNPC), with a peak daily production of 152.4 million cu m, or about 3.8 million tons annually.
A CNPC spokesman yesterday said he is not aware of the deal.
The supply, due to be available from 2013 from the Shwe and ShwePhyu fields in Myanmar's A-1 offshore block and Mya field in A-3 offshore block, amounts to about 7 percent of China's current gas consumption of about 2.225 billion cu m per day.
Currently meeting only 3 percent of China's total energy needs, gas use is set to grow at a 10 percent compound annual rate to about 5.49 billion cu m per day by 2020, according to Bernstein Research.
Daewoo has a 51 percent stake in the consortium. The other shareholders are India's Oil and Natural Gas Corp with 17 percent, Myanmar Oil & Gas Enterprise with 15 percent, India's GAIL with 8.5 percent and Korea Gas Corp with 8.5 percent.
Daewoo will spend $1.68 billion in initial investments for five years until 2014, and KOGAS will spend $299 million, the two firms said in separate statements.
A KOGAS official said the total investment by the consortium would amount to about $5.6 billion, including $4.6 billion in initial spending.
The consortium will undertake production and offshore pipeline transportation, while land transportation to China will be jointly managed with China National United Oil Corp (CNUOC).
The investment still needs approval from the Myanmar government, and CNUOC has yet to decide details of its investment for land transportation to China.