Feb. 19 – The Indian government on Thursday approved ONGC Videsh Ltd. (OVL) and AIL (India) Ltd. to pick up a 12.5 percent stake in a China pipeline project in Myanmar.
It also allowed the two entities to invest US$1 billion in fields that will provide gas to be shipped to China through the pipeline.
The two companies are taking a stake in the pipeline being constructed by the China National Petroleum Corporation to transport gas found off the Myanmar coast, an official spokesman said. CNPC is building the US$2.01 billion pipeline to ship gas from the coast, where OVL and GAIL hold 17 percent and 8.5 percent stake, respectively.
Gas from the blocks would be sold to China for US$7.72 per million thermal units at the landfall point in Myanmar.
That is a smart move on the part of the Indian government and a win-win for both China and India. The Burmese sell the gas and get a lot of cash to keep the junta going. China gets to use this gas. The Indian energy companies may not have won access to this gas supply but at least they can profit from it’s transport. They can then use the profits to buy energy supplies from other sources.
Also do I detect some practical diplomacy here where the Chinese and Indian energy companies can work together which in turn enhances confidence-building measures not just between the various companies but also between the two governments. If China and India can work on other partnerships outside of places where there are overlapping interests (like Myanmar) then it could be a case of where even governments can grow up?
If India and China can work together like brothers, what else they can’t conquer in this world?