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Better Gas Technology, Infrastructure Crucial to Solving Power Problem

Myanmar, one of the fastest growing economies in the world, is nevertheless notorious for its insufficient supply of power. Despite several State and regional Master Plans and programs, just one third – or 3.7 million out of the 10 million households in the country – enjoys access to electricity.

Meanwhile, the government’s losses, accumulated on the back of unsustainably low electricity tariffs since the previous administration, continues to mount, and that perpetuates the shortage despite a State mandate for Myanmar to achieve universal electrification by 2030.

Kyaw Kyaw Hlaing, chair of the SMART Group of Companies, a local oil and gas conglomerate, reckons the present power shortage problems are par for the course in a country that is developing much faster than its government or existing infrastructure can keep up with. “This country will not grow if things are easy, but only when there are challenges to overcome. And Myanmar faces many challenges on the power supply front,” he said at the 2017 Myanmar Green Energy Summit last week.

The way Kyaw Kyaw Hlaing sees it, the private sector could make better use of its time and money by accepting the present business conditions and investing towards a better economy in the future instead.

“Electricity tariffs are heavily subsidised and must be raised. The decision makers know this very well. But raising tariffs is a political issue, not just an economic one. No government wants to anger the public. As such, if you want to operate or invest here, don’t question the existing policies or complain. It would be better to look forward,” he said.

Gas exporter

There is plenty to be done on that front. Myanmar is actually among one of the largest gas exporters in the world, with abundant onshore gas fields as well as some 1.8 million sq miles of resource-rich waters in which to explore for gas. That is double the size of the UK. Currently, the bulk of the country’s gas supply comes from four offshore gas fields –Yadana, Yetagun, Shwe and Zawtika – which are operated by France’s Total, Malaysia’s Petronas, South Korea’s Daewoo and Thailand’s PTTEP, respectively.

“There will be many more discoveries because we also have a total of 27 other international oil companies working for 29 production sharing blocks in the country. Reliance from India, CNPC from China, Chevron from the US, Statoil from Norway and ENI from Italy, name them and they are all here,” Kyaw Kyaw Hlaing said.

Just last month, gas was discovered by Australia’s Woodside Petroleum at Block A-6, off the coast of Southern Rakhine, at water depths of up to 4,570 meters. It was the deepest gas well ever drilled in Myanmar, and the third finding in the same area over a period of five years. The two earlier discoveries, at 200 meters and 2,034 meters respectively, were made in 2012 and 2015. Now, Woodside is planning to drill fourth well at Block A-6.

In fact, Myanmar currently produces about 1.9 billion cubic feet of gas annually, yet the country consumes just around 300 million – 400 million cubic feet of what is produced, while the remaining 1.5 billion cubic feet is exported. Why is the country exporting so much gas when its own energy needs are not met? “The reason is it takes almost ten years from the day gas is discovered to the day it can be delivered and sold in Myanmar, and this is gas produced in shallow waters,” Kyaw Kyaw Hlaing said.

For fields in deep waters, such as the recent Woodside discovery at Block A-6, it will take more than a decade before the gas discovered there is commercially viable in Myanmar. This is because production wells must first be drilled and off-take agreements negotiated with buyers before the gas actually reaches the power plant. As such, most of the gas produced is exported instead.

Notably, Myanmar also lacks the facilities needed to transport and deliver gas in its liquefied form, which is a means used by other countries to speed up gas deliveries. “Myanmar has no deep sea port and building a new liquefied natural gas terminal could take two to four years. Existing pipeline infrastructure is also aging. Even if Total can supply 200 million cubic feet of gas, the pipelines will not be able to manage this. We will have to build new pipelines as well,” he said.

Depleting supply

In that light, Myanmar should focus more on developing new sources, technologies and infrastructure to help speed up the delivery process. “We used to have a lot of cheap onshore gas fields like Payagon, Apyauk, Nyaungdon, Shwepyithar and Pyay. That is why the government agreed to the low tariffs in the first place. But those wells have been depleted and the low-hanging fruits are gone,” Kyaw Kyaw Hlaing said.

Meanwhile, gas at the Yadana offshore field, which has been in production since 1998 and currently supplies gas to most of Yangon’s power stations, will dry up by 2021.

How then, will Myanmar meet its rising energy needs?

While there could still be gas left in the onshore fields, advanced technologies, such as horizontal drilling, may need to be deployed. However, these are new and expensive technologies. Meanwhile, to drill at new fields,  more fiscal support is needed. “If we can find a way to produce more gas onshore then the costs will be cheaper compared to offshore. But we will need to change the fiscal terms for this and that will take time,” he said.

In the meantime, Myanmar must look towards other forms of energy to fill the present power gap. Kyaw Kyaw Hlaing reckons renewable and clean sources of energy such as solar and wind power have huge potential. “In our Master Plan, coal plays a big part in the future energy mix of Myanmar. But Myanmar does not produce any coal so we will have to import large amounts of it to run a power plant here. This is not sustainable. Energy security is also national security, so we should not rely on importing coal,” he said.

Hydropower, too, has its limits. “There are heavy social and environmental consequences involved in hydro-power plants. Moreover, hydropower is only useful in the rainy season, when less power is needed. During the summer months, when electricity usage goes up, there is no water anyway. So, harnessing renewable energy is our best bet,” he said.

 

Source: Myanmar Times

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