Myanmar to import LNG

Jul 07, 2013 12:00 AM

U Aung Than Oo, deputy minister of electricity, says liquefied natural gas will be imported through private companies to help meet rising demand for electricity.

The government will import liquefied natural gas to compensate for a shortage of gas for gas-fired power plants, officials said.

U Aung Than Oo, deputy ministry of electricity, told The Myanmar Times on July 4 that four new gas-fired plants in Yangon Region need gas so that they can begin generating electricity in October. “They have a combined capacity to generate 270 megawatts. We need 230 million cubic feet per day [mmcfd] for them,” he added at a ground-breaking ceremony for a combined cycle gas-fired power plant in Mon state’s Mawlamyine township.

On July 1 the ministry announced a tender for private investors to import liquefied natural gas. U Aung Than Oo said a total of 500 mmcfd is needed for gas-fired power plants across the country. Kim Jong-inn, an energy specialist at the Asian Development Bank, said natural gas is vital for Myanmar’s energy needs. “In the short and medium term, it is inevitable that Myanmar has to depend on gas power plants. But availability of gas for power generation is a really challenging issue as the gas produced from the existing fields is committed to either export or domestic use,” Mr Kim said.

The new M3 and M9 offshore fields are still in the exploration and development stages and industry observers say it could be several years before they reach the commercial production stage. Mr Kim said the government should extend the existing power grid to remote areas and expand off-grid renewable energy. The government approved an independent power producer (IPP) system in January and signed a memorandum of understanding with IPP Myanmar Lighting, which is operating the new plant in Mawlamyine township, in the same month. U Sein Wan, the company’s chairman, said it had imported machinery from Turkey and that it will begin supplying power early next year. “We are going to transmit 43.5MW in the first phase beginning in February. When we start the second phase in August we will be able to supply 98MW,” he said.

The final stage will be completed in 2015, the company said. This will allow it to supply 230MW throughout Mon and Kayin states, with surplus power sent to the national grid, U Sein Wan said. The company said it is investing US$174 million in the power plant and that it will need natural gas to run it. It will sell electricity to the government at K120 per kilowatt hour, U Sein Wan said.

Myanmar has proven natural gas reserves of 7.8 trillion cubic feet and exports in 2011 totalled 303 billion cubic feet, according to the report New Energy Architecture: Myanmar, which was released by the ADB at last month’s World Economic Forum in the capital. Mr Kim said it was critical for the government to consider three factors when developing an energy policy. It should consider how much energy is needed, how various existing sources can be used and how to achieve a mixed energy plan. The latter includes long-term financing and institutional arrangements to ensure supply, he said.

Mr Kim said that in the short term “rehabilitation of existing power generation, transmission and distribution networks should be undertaken to recover nominal capacity and reduce system losses”. U Aung Than Oo said power losses due to an obsolete transmission and distribution system could be 22-26 percent.

As of early this year, Myanmar consumes about 2060MW of electricity per day, with 72pc from hydro power, 24pc from natural gas and 4pc from coal. The government has signed six deals for new gas-fired plants, according to officials at the electricity ministry. Demand for natural gas is double supply. The country needs 700 mmcfd of natural gas for domestic use but only 300 mmcfd is supplied. Most, 60pc, is used for 10 gas-fired electricity plants. Another 12pc is used to make fertiliser and 10pc is used for compressed natural gas, according to the ADB report.

U Aung Than Oo said “the government has agreed to supply more natural gas for domestic use”. “We are going to get 100 mmcfd more this year this year, but that is still far short of demand. So we will likely import gas through private companies,” he said.

Even if electricity output doubles every five years, it will take five years to meet Myanmar’s current needs, but during that time demand will also rise about 12pc a year, according to the ADB report.

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