LONDON, May 7: British multinational giant Cairn Energy along with Shell is bidding to construct an `under-sea gas pipeline' from offshore gas fields in Chittagong to Calcutta to export gas, after Bangladesh becomes surplus in next three years.

``The preliminary discussion on the projected 330 nautical mile under-sea pipeline between offshore Chittagong and eastern seacoast in India, most probably Calcutta, have already been held with Gas Authority of India,'' a Cairn Energy spokesman said.

He said the pipeline would link the ``most promising gas finds struck at Sangu offshore fields recently with gas terminal to be built on the eastern Indian coast''. The spokesman said that Sangu would go on stream in April, 1998 with an initial production capacity of 160 million cubic feet of gas per day, which within a year would be boosted up to 200 million cubic feet per day.

The Sangu gas fields are believed to contain more than a trillion cubic feet of gas and recently Cairn Energy entered into a 200 million pound sterling `strategic alliance' with British petroleum giant Shell to develop Cairn gas interests in Bangladesh and extend the partnership to exploratory oil and gas work and power projects in India.

In the new Cairn-Shell alliance, the Scottish multinational company agreed to give half of its interest in two blocks offshore of Bangladesh, including a half share in Cairn's 75 per cent interest in Sangu field to bigger Shell company.

In exchange, Shell will pay Cairn 130 million pounds sterling and will fund all exploration and development costs up to a total of 200 million pounds. However, the ambitious east-coast gas pipeline would most likely be a three way venture between Cairn, Shell and their contracting American engineering firm.

``The alliance creates an area of mutual interest in Bangladesh and the intention is to exploit the region's huge energy markets, with the prospects of pipeline to export gas from Bangladesh to India,'' the Cairn spokesman said.

Bill Gammell, the Edinburgh-based company's chief executive commenting on the strategic alliance with Shell said, ``the company's strategic position in southern Asia would be considerably enhanced.''

Cairn Energy has a strong presence in India already as last year it bought over 22 per cent interest in the Australian petroleum firm Kavran's subsidiary in India called Kavran Petroleum India.

The company now has the rights on the Ravva gas fields in Cauvery basin which produces 35,000 barrels of crude oil a day, representing six per cent of total oil production in India.

Cairn will immediately transfer 25 per cent of its Bangladeshi interest to Shell, with the second 25 per cent dependent on the success of the Cairn/Shell alliance securing new acreage in the forthcoming Bangladeshi oil licensing round.

Shares in the exploration company soared in the London stock market after the discovery of the Sangu gasfields last year, raising the prospects of giant gasfields in the two offshore blocks which the Scottish company is exploring.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.