The Gas Authority of India Limited (GAIL) has strengthened its presence in Myanmar further with the news that its move for an equity stake in the another of the country’s promising gas fields has been sanctioned. According to reports covered by Dow Jones today, officials in Myanmar have backed GAIL’s agreement with South Korea’s Daewoo International Corp. that will see the Indian NOC take up a 10% interest in the A-3 natural gas exploration block that Daewoo operates.

Significance: Daewoo was awarded the licence for the 6,780-sq.-km A-3 block in 2004 and reached a tentative deal over a production-sharing contract (PSC) with GAIL the following year (see Myanmar: 4 October 2005: India’s OVL And GAIL Acquire Equity in Daewoo’s Gas Block in Myanmar). Expectations are high for the development of the gas reserves identified in place at A-3 block, and even more so for the adjacent A-1 block. Exploratory drilling in the former is expected to commence later this year, while the commercialisation of the latter is further along and likely to commence production in 2009.

The activities of GAIL and other Indian NOCs in Myanmar’s upstream sector will continue to strengthen the claims for the development of an overland gas transmission pipeline linking the two countries.