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Myanmar developing 4,000 MW of LNG-to-power projects: minister

Singapore — Myanmar is developing 4,000 MW of LNG-to-power projects as natural gas imports rise in response to reduced hydroelectric supply and declining domestic gas production, the country's energy minister said in the run-up to the Japan Producer-Consumer Conference 2020.

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The Southeast Asian country began its first LNG imports in June using small-scale vessels to supply emergency power projects that helped alleviate electricity shortages around the densely populated city of Yangon.

Myanmar had planned to open its first LNG-to-power plant in Yangon in April, delivering 750 MW of electricity, but COVID-19 had an unprecedented adverse effect on demand and supply of oil and gas, which in turn destabilized the LNG supply chains, U Win Khaing, Union Minister, Ministry of Electricity and Energy, said in a video message.

"Myanmar faced significant delays and finally managed to commission the LNG power plant only in September," he said.

Khaing said that before 2020 the country did not import LNG and used domestic natural gas for power generation.

He said Myanmar's generation mix was roughly 50% hydro power and 50% domestic natural gas until two major events happened: due to climate change, global warming and reduced rainfall, water levels at its main reservoirs fell, resulting in reduced hydropower output, and gas production declined gradually.

Myanmar had to decide quickly how to fuel rising electricity demand, especially with government plans to fully electrify the country by 2030. Myanmar's electricity grid already reaches 54% of the population, with 75% targeted by 2025, the minister said.

In January 2018, a task force initiated plans to build three new LNG-to-power plants with 3,000 MW capacity by 2023. Soon this had grown to six plants with total installed capacity of 4000 MW, out of which 1,250 MW has been awarded to a Japanese consortium under a government-to-government agreement, Khaing said.

Energy mix

The country will have about 8,118 MW of power generation in 2020-21, and this is expected to grow to 10,379 MW by 2025-26, and triple to 23,594 MW by 2030, according to its National Electricity Master Plan.

While hydropower, renewables and natural gas will grow their market share, the plan also indicated the introduction of coal into Myanmar's power mix by 2030 in a big way, accounting for roughly one-third of total power generation.

This is in line with the economic reality in most Asian countries as coal remains the cheapest and most abundant supply source. The recent drop in gas and LNG prices has helped drive new gas projects, but long-term price trends still remain uncertain, affecting energy security considerations.

"Fortunately, we enter the LNG market at a time of low prices. But we should be prepared for price adjustments based on global markets and geopolitical events," Khaing said, adding that the imported gas can also be used in other sectors like manufacturing and production in industrial zones, fertilizer, cement and steel.

"The second phase would be to look into expanding the LNG terminal facilities to handle more LNG transactions," Khaing said. "This would definitely have a positive outcome for LNG producers and exporters as the Myanmar market will develop quickly."