Monday 22 July 2013

Myanmar seeks natural gas imports from 2014 on growing power, industrial demand

Myanmar is looking to import natural gas starting next year in order to meet surging domestic demand, an official with the Yangon Electricity Supply Board said Friday.

The YESB has issued a tender, which will close at the end of July, calling for supplies of between 150,000 Mcf/day and 200,000 Mcf/day to start from March next year, said U Aung Khaing, chairman of the YESB.

"After 2014, we are looking for 500,000 Mcf/day to 600,000 Mcf/day of imported gas," he said.

The volumes are needed for the electricity sector, which suffers from frequent power cuts, as well as for industrial customers, he said.

However, Aung acknowledged that Myanmar currently does not have any infrastructure to receive or transport LNG.

"We do not have any infrastructure now so the supplier has to have the appropriate floating storage vessels," he said. "The nearest connection point would be a platform 24 miles offshore south of Yangon."

Aung said expressions of interest had come from a few parties, including from Thailand and the US.

The YESB supplies power to Yangon, while the Electricity Supply Enterprise covers the rest of the country. Much of the electricity supply in Yangon is now generated from hydropower, but this leads to shortages during the dry season.

Local media in February quoted YESB vice-chairman U Maung Maung Latt as saying consumption in Yangon had grown by 15% annually in recent years. Yangon accounts for just under half of the electricity Myanmar consumes each year. The Asian Development Bank said in an October report that Myanmar's energy consumption is shifting in favor of natural gas, which increased 15.1% annually during 2000-2009. Biomass accounts for two-thirds of the energy mix, with gas, coal, oil and hydro making up the remainder.

Sixty percent of domestic gas consumption goes to gas-fired power plants, while fertilizer plants, industry and the transport sector make up the rest, according to the ADB.

Within the power sector, gas-fired capacity accounted for 21% of Myanmar's total installed capacity of 3,495 megawatts in 2012, the report said.

Ironically, Myanmar is a gas-rich country and is one of the top exporters in Southeast Asia.

Thailand's PTT Exploration and Production currently imports 80% of supplies, or 1.1 Bcf/day, produced from the Total-operated Yetagun and Yadana fields in the Gulf of Mottama. Gas sales started in 1998 and will run for 30 years.

The Shwe gas project from offshore blocks A-1 and A-3 in the Bay of Bengal started producing this month, although 80% of output from the 500,000 Mcf/day field will be piped to China, also for 30 years.

From next year, gas from the Zawtika project in Blocks M9 and M11 in the Gulf of Martaban will start production, with PTTEP buying 240,000 Mcf/day and Myanmar using the remaining 60,000 Mcf/day domestically, a source at PTTEP said Friday.

Officials from PTTEP's parent PTT had said last October that it would be willing to consider adjusting its Myanmar gas import volumes if the latter requested for more allocation to meet domestic demand.

The Thai source added that there have been discussions for Myanmar to channel more gas domestically from future projects that have yet to be developed.

source: Platts

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