Natural Gas Lode Confirmed in Myanmar

It has been confirmed that the proven reserve of liquefied natural gas (LNG) of the gas fields in Myanmar developed by Daewoo International Corporation is enough for Korea to use for five years. It is the largest size gas field developed by domestic companies so far.

The president of Daewoo International, Lee Tae-Yong, held press conference on August 10 and said, “In three gas fields in the sea off northern Myanmar, ‘Shwe’ in ‘Block A-1’ and ‘Shwe Phyu’, ‘Mya’ in ‘Block A-3’ hold recoverable reserves of up to 4.8 to 8.6 trillion cubic feet (ft3) and we acquired certification for the fact from the GCA, an American international certification agency.”

This is the 20 times larger amount than in the gas field of the ‘Donghae-1’ in the East Sea (250 billion ft3) developed for the first time in Korea and now in production by the Korea National Oil Corporation (KNOC).

President Lee explained, “With the reserves of three gas fields, we can produce 3.7 million tons of LNG each year during the contract period of 20 to 25 years or 600 million ft3 of PNG (pipeline natural gas) every day during the same period. In energy sources consumed in Korea such as oil or gas, LNG accounts for about 20 percent.

With this development, the ratio of energy produced by domestic companies to energy consumed in Korea will rise from 4.1 percent in 2005 to 6.1 percent in 2009.

The company forecasted that the production of gas would be possible as early as 2009.

Since many countries including India, China, Thailand, Taiwan and Japan are now expressing their interest in purchasing the gases to be produced in Myanmar, the company is now expecting to open a deal with these countries within the second half of the next year.

President Lee said, “The cost of development, which is expected to reach 1.3 billion won, will be easily financed by selling Daewoo department stores in South Gyeongsang Province and overseas assets and through financial institutions’ project financing,” and explained, “If the production of gas starts, the company is likely to see additional net profits of more than 100 to 150 billion won.” Daewoo International recorded net profit of 172.3 billion won last year.

Aside from this, the company is now planning to explore and test drill in two places in ‘A-3 Block’ in 2007, which are also estimated to contain large amount of gas.

Daewoo International Corp. started the development of ‘A-1 Block’ and ‘A-3 Block’ in August of 2000 and holds 60 percent of right to the development profit.

Others who have shares in this project are India`s Oil and Natural Gas Corporation Ltd. (ONGC) with 20 percent, marketing firm Gas Authority of India Ltd. (GAIL) and Korea Gas Corporation (KGC) with 10 percent each.

larosa@donga.com