India has lost out to China on import of natural gas from Myanmar offshore fields where Indian state-run firms have 30 per cent stake.

Myanmar government in February this year decided to sell gas from Blocks A-1 and A-3 to China through the pipeline route, Minister for Petroleum and Natural Gas Murli Deora said in reply to a question in Lok Sabha.

India's ONGC [Get Quote] Videsh Ltd has 20 per cent stake each in the two blocks while gas firm GAIL held 10 per cent apiece.

"Myanmar issued a Letter of Intent on February 11, 2004, wherein GAIL was acknowledged as a preferential buyer of gas from these blocks. An MoU to this effect was signed between the two countries on March 9, 2006," he said.

In terms of the provision in the LoI and MoU, GAIL completed a detailed feasibility report for an onland pipeline from Myanmar passing through north-eastern states of India.

Myanmar Government on August 9, 2006 invited bids from prospective buyers like India, China and Thailand for export of gas. In October, the Myanmar government intimated none of the bids met its expectations. Subsequently, it invited bids for sale of 3.5 million tons of liquefied natural gas. GAIL again submitted its bid.

Deora said Myanmar Government subsequently informed that a part of gas from A-1 and A-3 was to be used to meet domestic demand and that the export option - LNG project or pipelines to India or Thailand - would be decided only after reassessment of reserves.

It was indicated that pipeline to China was not under consideration, he said, adding yet Myanmar in February agreed to export gas to China through an onland pipeline.

"In the meeting held in February 2007 between Myanmar Government and PetroChina, Myanmar Government decided that the gas from A-1 and A-3 blocks would be sold to China through the pipeline route," Deora said.

GAIL was informed of the decision in a meeting on March 16 this year.

"GAIL impressed upon the other partners (Daewoo [Get Quote] and Korea Gas of South Korea) and Myanmar Government that GAIL's pipeline offer was still the most competitive and offered optimum value for them due to proximity of India to these fields. However, Myanmar Government's decision to sell the gas to China remains as of now," he said.

India pursued the option of a pipeline from Myanmar through north-eastern states, bypassing Bangladesh. As per the DFR done by GAIL, the proposed pipeline would have passed near

Aizwal (Mizoram), Silchar and Guwahati (Assam), Siliguri (West Bengal) and Gaya (Bihar) with a design capacity of 18 million standard cubic meters per day and the length of 1,573-km from Myanmar-India border to Gaya (Bihar). The estimated completion schedule was 30 months after project approval.

Initially the option of laying a pipeline through Bangladesh was considered. "However, owing to differences with Bangladesh, the alternative option of pipeline through north-eastern states of India, by passing Bangladesh, had to be considered," he said.