By Simon Denyer

NEW DELHI, Oct 10 (Reuters) - India is pushing ahead with plans to help Myanmar develop a port on its northwestern coast that it hopes will become the centre of a gas bonanza, but which was also a focal point of pro-democracy protests.

The city of Sittwe, on an island near the mouth of the Kaladan river, will become the onshore hub of Myanmar's gas industry once vast reserves in the Shwe fields in the Bay of Bengal are developed, reserves which India hopes to tap.

But it was also the scene of major pro-democracy demonstrations last month which were suppressed by soldiers.

India said that was not its concern.

"What is happening would be a problem for the regime. Let's see how it impacts on other projects," one official, who declined to be named, told Reuters. "But so far we would like to think that things are on track in terms of bilateral commitments."

The Business Standard newspaper reported on Wednesday that India would sign a formal agreement with Myanmar on the Kaladan port in a few weeks time, after pledging $103 million. The official played down this report, saying the project would involve more than one agreement and that no date was yet fixed to sign anything.

"But it certainly is something which both sides would like to go ahead with, and a lot has been worked out," he added.

India hopes that the port at Sittwe will also open India's landlocked, underdeveloped and troubled northeastern states to international trade through the Bay of Bengal.

New Delhi initially supported Nobel Laureate Aung San Suu Kyi's National League for Democracy but changed its strategy in the early 1990s to court the military regime in what is seen as an effort to counter rival China.

Sharing a 1,645-km (1,000-mile) border with Myanmar, it has made only a muted call for political reform there despite the violent response to the demonstrations.

It is also building roads and railways there, has supplied arms and competes with Beijing for Myanmar's oil and gas.

Its oil minister visited Myanmar last month even as pro-democracy protests were reaching a crescendo to talk about energy cooperation and witness the signing of a deep-water exploration deal.

But New Delhi was disappointed in March when Myanmar agreed to sell gas from two offshore fields to China, even though Indian firms have a 30 percent stake in those fields.

India is also seeking Myanmar's help in combatting insurgent groups with bases inside its neighbour.

But critics say it has little to show for closer relations with the junta and needs to support global efforts to promote change in Myanmar, both as a matter of principle and to promote longer-term stability and prosperity in the region.

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