South Korea-based Posco International has reportedly begun work on Phase II of the Shwe gas field project A-1 off the Arakan coast.

The Department of Fisheries on November 14 issued a proclamation prohibiting the passage of small vessels, light vessels, fishing vessels and motorised vessels passing around the block area for 4 km of the offshore block operation.

A Notice to Mariners was issued at the drilling site during Phase II of the Shwe gas field project on Offshore Block A-1 to avoid any delays during the drilling campaign, the statement said.

The Shwe gas field project has blocks A-1 and A-3, and A-1 includes Shwe and Shwe Phyu offshore gas fields. Posco International plans to commercialise four development wells in each of these blocks.

Posco International plans to put about US$470 million into Phase II of the She gas field project, with further plans to invest in Phase III.

Such gas exploration should not be carried out at a time of political instability in the country, said Ko Myo Lwin from the Ann Township Oil and Gas Pipeline Monitoring Group.

“The gas exploration site is located in Arakan State. However, the Shwe gas field project did not benefit the Arakanese people. Arakan State produces and sells its valuable resources, but the locals suffer more bad than good,” he said.

Ko Myo Lwin said locals have previously demanded that some of the profits from the Shwe gas field project be used for Arakan State, to little or no avail.

At present, Posco International has completed all the necessary steps to start Phase II of the project, and only the gas production part remains, said Ko Tun Kyi, executive director of the Kyaukphyu Township Peace and Development Center.

“Since Posco International is a business venture, it is almost certain that the project will go ahead. It is not yet known where the gas will be sold, but it is likely to be sold only to China. The contract for the project has already been signed, so there will be further losses for Arakan State,” he added.

 “Myanmar should be built as a federal democratic union. Resource extraction should be done only after a federal democratic union is built. Therefore, such resource extraction should be stopped before a federal democratic union can be established,” Ko Tun Kyi said.

Posco International has a 51% stake in the Shwe gas field project as an operator, with South Korea’s KOGAS, Myanmar Oil and Gas Enterprise (MOGE), and India-based ONGC and GAIL holding minority stakes.

The Shwe gas field project has been exporting natural gas to the China National Petroleum Corporation through pipelines since 2013, with a contract delivering more than 500 million cubic feet per day.