MYANMAR
Myanmar Times-May 23
Larger volumes of natural gas will be available from Myanmar’s onshore and offshore gas fields within the next five years, yielding fresh opportunities for international oil and gas firms to invest in the sector, said U Win Khaing, Union Minister for Electricity and Energy (MOEE).
“Gas production will be a priority for the government over the next few years. However, we do not have the capital or the technology to do so. We need to cooperate with international oil and gas firms to produce the gas and in doing so make it available for the country as soon as possible,” he said.
U Win Khaing’s announcement comes even as ongoing price negotiations on the import and distribution of liquefied natural gas (LNG) takes place between the MOEE and several international gas firms.
The government is planning to import LNG to fill an existing shortage of electricity in Myanmar. Over the next two years, it has promised to double the current supply of electricity to 6,000 megawatts using LNG.
The ministry is trying to make gas available in addition to electricity and transportation to ten economic zones in future as the phase 1, he informed energy circle.
“LNG will not only benefit the electricity sector but also create export opportunities, helping to narrow the trade deficit,” U Win Khaing said.
Because of the high conversion costs involved though, LNG becomes a less viable alternative over the longer term. “As such, our target is make domestic natural gas available from 2023 onwards. It will take next four or five years if we start exploration and production (E&P) work now,” U Win Khaing said.
Gas shortage
In Myanmar, natural gas produced at the local Shwe, Zawtika and Yadana offshore fields is transported via pipelines to power plants where it is used to generate electricity to meet domestic demand. However, MOEE and Myanma Oil and Gas Enterprise (MOGE) officials have warned since 2016 that production from those blocks is in decline.
“The existing wells are decreasing in production so we must start E&P work now to make gas available over the long term while using LNG to fill the gap in the short term,” said U Win Khaing.
Meanwhile, existing gas plants and pipelines will be repaired, upgraded or expanded to receive higher volumes of natural gas in the next five years.
Inviting investments
Foreign direct investments will be needed for the MOEE’s plan to work. The MOEE is already considering potential new measures to draw investors. “We should be more flexible when negotiating contracts with international firms. The new contracts cannot be based on current terms and conditions, which are at least 20 years old. We are prepared to be more flexible with our terms, ensuring they align with current oil prices and global conditions. These new measures will bring investors back to the Myanmar oil and gas sector,” said U Win Khaing.
So far, the MOEE has yet to hold bidding rounds for new onshore and offshore oil and gas blocks.
