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Myanmar's fast-track LNG-to-power plants put country on global LNG map

Singapore — Myanmar imported its first LNG cargo in June on a small-scale LNG carrier from Bintulu in Malaysia, on the back of LNG-to-power projects built in a record time frame of nine months, in the middle of a pandemic. Its LNG imports cost a fraction of its own oil-linked pipeline gas exports, although draft restrictions have necessitated the use of a relatively expensive small-scale logistics chain.

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*Platts JKM for September was assessed at $2.70/MMBtu on August 3. Spot LNG imports are cheaper for Myanmar than its own oil-linked pipeline gas exports to China and Thailand.

*Pipeline gas exports to Thailand, from the Yadana, Yetagun and Zawtika fields in Myanmar were priced at $6/MMBtu for the financial year 2020-21, compared to $8.88/MMBtu for 2019-20, according to a report in the Myanmar Times in July, citing oil ministry officials.

*Pipeline gas exports to China from the Shwe gas field was priced at $5.20/MMBtu for the financial year 2020-21, compared to $7.40/MMBtu in the previous fiscal, the report said.

*Myanmar's pipeline gas exports are priced on the basis of Singapore fuel oil prices, US Oil & Gas Field Machinery & Equipment Index and US Consumer Price Index, and additional pipeline costs to China or Thailand.

*Asia Pacific day rate for LNG vessels is $32,000/day for a regular sized LNG carrier. However, charter rates for small-scale LNG carriers are similar due to low availability. The cost is justified by large penalties for not meeting project delivery targets.


*The LNG terminal is located in Thanlyin township along Yangon river. Myanmar's first LNG cargo arrived on CNTIC VPower Global, a 15,000 dwt small-scale LNG carrier, on June 6, according to Yangon port authority. LNG was supplied by Petronas from its Bintulu terminal in eastern Malaysia.

*CNTIC VPower Global doubled up as a floating storage unit since the original FSRU was delayed. The 1992-built LNG carrier Northwest Seaeagle is being converted to an FSRU in a Singapore shipyard.

*The 90,607 dwt Golar Kelvin loaded another cargo at Bintulu and has been anchored near Petronas' Melaka LNG terminal in the Malacca Strait. The 11,612 dwt vessel Surya Aki is making milk runs from Golar Kelvin to Thanlyin using ship-to-ship transfers.

*The unique small-scale LNG supply chain is a first for Myanmar and Southeast Asia. It has been necessitated because of shallow draft at Burmese ports of Yangon and Thilawa and sand bars on the river that restrict navigation.

*Bahamas-flagged Surya Aki, owned by Japan's MOL Mitsui OSK Lines, is managed by Indonesia's Humpuss Intermoda Transportasi, which previously used small-scale LNG to supply state-run PLN's gas-to-power Benoa plant in Bali.

*Myanmar's installed power capacity by fuel is 1.9 GW of gas, 3.5 GW of hydro, 0.5 GW of coal and 0.1 GW of diesel, according to S&P Global Platts Analytics. The LNG-based power plants could add an average 2 million cu m/d to gas demand, and up to 4 million cu m/d for shorter periods if fully utilized, it said.

*Myanmar produces about 50 million cu m/d of pipeline gas, more than half of which is exported to China and Thailand.


*CNTIC VPower, a joint venture between Hong Kong-listed VPower Group and China National Technical Import and Export Corp announced in October 2019 a tender award for three LNG-to-power projects in Myanmar – 400 MW in Thaketa, 350 MW in Thanlyin and 150 MW in Kyauk Phyu.

*CNTIC VPower and Electric Power Generation Enterprise of the Ministry of Electricity and Energy of Myanmar signed a power purchase agreement for the Thaketa plant with an initial term of 60 months on June 10, 2020.

*On June 14, 2020, the Thaketa plant in Yangon, with an installed capacity of 477.1 MW started generating electricity -- the first time LNG was used for power generation in Myanmar.

*On June 26, 2020, CNTIC VPower signed PPAs for the Thanlyin and Kyauk Phyu plants, also for 60 months. The two plants have installed capacity of 582.4 MW and commenced operation in phases from June 30, 2020.

*The plants were built on a fast-track basis to provide critical power supply for summer 2020, and completed in around nine months, making it the fastest LNG-to-power project of its kind.

*Myanmar is among the least electrified countries in the world and faces power shortages. It plans to raise the electrification rate from 34% in 2016 to 75% in 2025-26 and 100% in 2030-31.

*Its peak power demand in 2019 was 3.7 GW, it plans to add 1 GW on a fast-track basis in 2020 alone to alleviate power shortages in Yangon, its most heavily populated city.