Myanmar and fossil gas

From Global Energy Monitor
This article is part of the Global Energy Monitor coverage of fossil gas
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Myanmar has seen sustained economic growth with annual GDP growth rate of 5-7%[1] since the start of its economic reform in 2011[2], which has corresponded to an increased demand for energy and natural gas. However, Myanmar has one of the lowest electrification rates in Southeast Asia, with only 50% of the population having access to the grid.[3] The government has proposed increasing electrification to 100 percent of households by 2030.

Myanmar had 8,118 MW of installed capacity in 2020 and this is forecasted to grow to 10,379 MW by 2025 and triple to 23,594 MW by 2030.[4]

Myanmar Power Generation by Fuel[5]

The power generation mix in Myanmar is dominated by hydroelectric and supplemented by natural gas fired power plants that operate primarily during the dry season. Due the to rapid growth in electricity demand and variability in hydro output, Myanmar has been experiencing significant power shortages.[6]

Electricity Demand

As Myanmar continues its economic growth, demand for energy has started to outpace supply. The World Bank estimates that energy consumption will grow at annual rate of 11% until 2030. Peak demand is expected to reach 8.6 GW by 2025 and 12.6 GW by 2030. This demand increase will require 5 GW of generation capacity to be added by 2025. In June 2019, the World Bank estimated that Myanmar needs to double its investment in generation capacity from its historical level to meet this demand. [7]

Electricity demand in 2018 was 23,812 GWh[8] and is forecasted to reach 57,654 GWh in 2030 according to the 2015 Myanmar Master Energy Plan.[9]

Natural Gas Demand

Key Demand Drivers

Natural Gas Demand in Myanmar by Sector, 2017[10]

The power sector is the key driver of gas demand in Myanmar, with over 70% of domestic gas consumption used in power generation.[5] Natural gas demand in Myanmar has increased 1.4 times since 2011 which has primarily been driven by power generation. [10]

Compressed natural gas is used in the transportation sector as fuel but accounts for a small percentage of demand.

Industrial sector gas demand is very limited and there is no residential demand for natural gas as of 2017.[10]

Natural Gas Demand for Power Generation by Region[10]

Projection of Demand Growth

according to Myanmar's 2017 Natural Gas Master Plan, natural gas demand is forecasted to grow from 457 mmcfd, or 4.72 bcm, in 2017 to 1,142 mmcfd, or 11.8 bcm, in 2040.[10] While demand from the power sector is projected to dominate growth, demand from the industrial sector and residential sector are forecasted to grow significantly from their current 2017 levels.[10]

LNG-fired generation is forecasted to grow to around 25% (or 5 GW) of the capacity mix, which would require completion of all of the proposed LNG developments plus an additional capacity of 2 GW from not-yet-defined projects.[5]

Forecast of Total Natural Gas Demand in Myanmar[10]

Industrial demand for gas will be concentrated in the Yangon and Mandalay regions. Natural gas use is projected to increase in the Thilawah Special Economic Zone (SEZ) due to an increase in electricity usage for manufacturing factories. Since natural gas infrastructure in the Yangon region has already been established, it is estimated that an additional investment of $3.5 million to meet the added industrial demand. However, in the Mandalay region, a pipeline network of more than 40km will be needed in order to meet forecasted industrial gas demand growth. The required total investment to develop industrial demand in the Mandalay region is estimated at $24.5 million.[10]

Natural Gas Supply

As of 2019, Myanmar has 41.3 trillion cubic feet of gas reserves. Total gas production in Myanmar as of 2019, was 17.1 bcm. Pipeline exports in 2019 totalled 11.2 bcm, with 4.4 bcm to China and 7.1 bcm to Thailand. [11]

As of 2020, approximately one-third of total gas production is used domestically, while the rest is exported mainly to Thailand and some to China. [5] These exports to China and Thailand are under long-term contracts entered into in the 1990s when there was a surplus of offshore production compared to domestic demand. Gas production from existing gas fields is expected to decline over the next decade.[12]

Potential New Gas Sources

In mid-2020, Posco International discovered a new gas field with exploration well Mahar-1 in offshore Block A-3, which has an estimated 660 billion cubic feet of gas[13] and gas flow estimated at 38 mmscf/d.[14]

The Shwe Yee Htun gas field, which contain the A-6 and AD-1 blocks, are currently under exploration. Block A-6 is estimated to hold up to 3 trillion cubic feet of gas and first gas is scheduled for 2023. Myanmar also has 56 open onshore/offshore blocks that have not yet been explored or offered to investors yet.[15]

In 2013, PTTEP made a discovery in the offshore block M-3 in Myanmar.[16] The estimated gas flow rate from the wells was 34.5 mmscf/d.[17]

Current Gas Supply Projects

Myanmar's largest gas field is the offshore Yadana gas field, with a production capacity of 850 mmscf/d, followed by the Yetagun gas field, with a production capacity of 200 mmscf/d.[5] Approximately 75% of its output is exported to Thailand.[15]

Additional gas fields currently in production are the Shwe (production capacity of 300 mmscf/d) and Zawtika gas fields (production capacity of 200 mmscf/d).[5] Gas production from the Yadana and Zawtika fields make up approximately 65% of domestic gas production.[15]

The Schwe gas field is being developed in three phases. First gas from phase one was achieved in 2013 and phase two and three are currently under development. The Schwe gas project has received a lot of criticism and opposition due to environmental impact and not allocating sufficient gas for domestic use.[18]

Proposed Gas Supply Projects

In order to meet increasing energy demand, Myanmar has been considering LNG imports over the medium to long term. LNG import projects have been proposed since the early 2010s but delays in securing a bankable power purchase agreement for the offtake of electricity have delayed any progress.[5]

In June 2019, the Ministry of Electricity and Energy issued a tender for five emergency power projects totaling 1,040 MW, in order to alleviate power shortages. Two plants would use gas supplied by the government and three larger projects would use imported LNG. [19] In July 2019, a combination of VPower and CNTIC were awarded the project tenders, under very short deadlines to have the projects finished and LNG imports starting by April 2020. Three of the proposed power plants (Thaketa, Thanlyin, Kyaukpyu) were delayed due to Covid-19 restrictions, but started operation in summer of 2020. [5] These emergency power projects, located around the city of Yangon, started importing LNG in June 2020 on small-scale shuttle vessels due to the shallow river. [4]

Table 1: Proposed LNG Import Terminals in Myanmar
Project Name Location Cost (US$) Capacity Expected Commencement Date Sponsor Project Status Main Users
Rakhine LNG Terminal[20] Southwest Myanmar [21]Phase I: 3 mtpa

Phase II: 6mtpa

Phase I: 2025

Phase II: TBD

Under construction Kyaukpyu gas plant
Mee Laung Gyaing FSRU LNG Terminal Ayeyawady region $2.57 billion 2024 Zhefu Holding Group, Supreme Trading Co.[22] Proposed Mee Laung Gyaing 1390 MW Power Plant
Kanbauk FSRU LNG Terminal[23] Tanintharyi region $2.1 billion 2024 Total E&P, Siemens Myanmar Proposed Kanbauk 1230 MW CC Power Plant
Yangon LNG Terminal Thilawa Special Economic Zone 4 mtpa 2026 Sumitomo, Marubeni, Mitsui, and Eden[24] Proposed
Table 2: Recent and Proposed Developments of Natural Gas Projects in Myanmar

Project Name Location Capacity Expected Commencement Date Sponsor Project Status Notes
Kyun Chaung Gas Plant Magwe Region 20 MW Summer 2020 VPower[25] Operating
Ahlone Gas Plant[26] Ahlon Township of Yangon 152 MW July 2020 China Energy Engineering Group-Hunan Electric Power Design Institute Co. Ltd (CEEC-PHEDI), China ITS (Holding) Co. Ltd, and Shenzhen Shennan Power Gas Turbine Engineering Technique Co. Ltd. Operating
Thanlyin LNG-to-power[26] Thanlyin Township 350 MW June 2020 VPower, CNTIC[27] Operating
Thakayta LNG-to-power[28] Township of Yangon 400 MW June 2020 VPower, CNTIC[29] Operating
Kyaukphyu LNG-to-power Rakhine State 150 MW June 2020[30] VPower, CNTIC[26] Operating
Ahlone Power Station Unit 2[31] Ahlone 388 MW 2024 Toyo Thai Myanmar Power Co., Ltd Proposed
Thilawa LNG-to-power Thilawa 1250 MW 2024[32] Sumitomo, Marubeni and Mitsui, Eden[33] Proposed
Thilawa Power Plant[34] Thilawa 75 MW[35] 2024 Myanmar Electric Power Enterprise (MEPE) Proposed
Kanbauk CC Power Plant[36] Tanintharyi 1230 MW 2022 Total, Siemens Proposed
Mee Laung Gyaing Power Plant[37] Ayeyawady region 1390 MW Phase I: 2022

Phase II: 2024

Zhefu Holding Company Proposed
Ywama Power Station[38] Yangon 300 MW 2022 Electric Power Generation Enterprise (EPGE) Proposed
Myeik Township Power Station[39] Myeik 610 MW Myeik Public Corporation Ltd., Korea Management Policy Institute Group Proposed
Kyaiklat Power Plant[40] Kyaiklat 600 MW 2024 PTT Exploration and Production Public Company Limited (PTTEP); Global Power Synergy Plc (GPSC) Proposed
Danson Bay Power Station[41] 4000 MW Korea Management Policy Institute Group Proposed

Projection of Gas Production

Production Outlook of Existing Offshore Fields in Myanmar[10]
Production Outlook of Existing Onshore Fields in Myanmar[10]

Domestic natural gas production is forecasted to decline. While new gas developments are being explored, this new production will not offset the decline in production from existing fields. Therefore LNG projects are expected to make up the difference between supply and demand.[10]

In Myanmar's Natural Gas Master Plan report, total domestic natural gas production is forecasted at 1,350 mmcfd, or 13.95 bcm, in 2025, and 810 mmcfd, or 8.4 bcm, by 2040.[42]

OIES Forecast for Myanmar Natural Gas Supply-Demand[5]

The 2020 Oxford Institute for Energy Studies report forecasts LNG imports around 3 mtpa, or 4.1 bcm, in 2030.[5]

Natural Gas Domestic Production Outlook in Myanmar[10]

Articles and Resources

References

Related GEM.wiki articles

External resources

External articles

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