New Joint Venture: Myanmar Petroleum Enterprise (MPE) signs 30 year lease with Yandanar Su for the operation of two LPG production plants.
03 Jan

New Joint Venture: Myanmar Petroleum Enterprise (MPE) signs 30 year lease with Yandanar Su for the operation of two LPG production plants.

The Myanmar government has published policies seeking to operate state owned enterprises through private partnerships. There are also other partnerships, some of which we outline in this blog. All are adding to the ongoing and growing inertia of the Myanmar economy. In this case the agreement is between MPE and Yandanar Su for Liquefied Petroleum Gas (LPG) production and distribution.

MPE have confirmed that they will contribute $2.2 million to the project. This will be for LPG production at the Nyaung Don LPG plant together with the operation of Liquefied Petroleum Gas filling stations in Ahlone, Insei, North Dagon and Hmawbi township. The Nyaung Don LPG plant was established in 2005 and produces LPG out of gas extracted from the onshore Nyaung Don gas field.

MPE figures indicate that state-owned LPG plants produce about 800 metric tons of LPG per day, covering only about 19 per cent of the country’s demands. The actual LPG demand in a year in Myanmar is between 50,000 to 60,000 metric tons. This has led to a rise in the price for LPG but the new JV will impose controls to limit further rises. Also, with combined JV budgets, it is hoped distribution can grow faster and reach more homes in a shorter timescale.

The Myanmar Government plans to reduce usage of electricity by improving distribution of LPG and also the reduction of wood burning for cooking and so reduce the increasing trend of deforestation. The target is for 1.5 million households to be using LPG within two years. There are 670 LPG stations with distribution licenses that come under control of the MPE and will now be linked to the new JV.

In another example of state owned assets being opened up to the private sector, Parami Energy Service Co. was awarded the rental tender, published in 2015, for the state owned No.1 Refinery, Thanlyin. Parami was established in 2004 and has grown to be the Parami Energy Group of Companies, 10 companies focussing on the Oil & Gas sectors as well as Construction, Power, tourism and event-planning. There published core values include, “integrity, professionalism, and sustainability. As a wholly-owned Myanmar company, we are committed to transparent relationships and take pride in our selective international partnerships”. It is Parami’s vision to become Myanmar’s ethical energy company.

There are important developments in this sector with major overseas investments. In 2015 an agreement was announced with PTT, the Thai state-owned oil and gas company, formerly the Petroleum Authority of Thailand. This gave the green light for a study on a Bt20 billion investment in a 3-million-tonne liquefied natural gas (LNG) floating storage and re-gasification unit for Liquefied natural gas (LNG) procurement and import in the southern city of Kanbauk, Myanmar.

In October Japan hosted the “Dialogue for Quality Infrastructure — Building Asia’s Future”. An event attended by about a hundred participants with the focus on the infrastructure required by Myanmar, for the sustainable development of the country and “how Japan can play an important role”. Councillor Kazuyuki Takimi at the Embassy of Japan in Myanmar stated in his opening remarks on behalf of the Government of Japan that “quality infrastructure is the principle for developing countries to develop appropriate infrastructure within limited resources. We will continue to contribute to Myanmar’s infrastructure development with Japan’s wealth”.

FocusCore works across all sectors to help companies become established in Myanmar and start trading as quickly as possible. Having established our own offices here in 2014 we work with Government Departments and many commercial sectors, enabling us to give your company the necessary guidance and information for you to prosper in this growing economy. Contact us today.

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