Myanmar cooks up LPG expansion plan

A PUSH to get more households to cook with liquefied petroleum gas (LPG) forms a key plank of a plan by the Myanmar government to ramp up the use of the fuel and devote more of the country’s electricity supply to targeted sectors.

Zaw Aung, director general of the Oil and Gas Planning Department, said at the recent World LP Gas Association (WLPGA) Myanmar Summit that Myanmar would double its efforts to meet an ambitious goal of distributing LPG to one million households by 2020. Myanmar is home to more than 10 million households, and fewer than 100,000 of them use LPG for cooking.

Zaw Aung said Myanmar would improve LPG business in cooperation with local and foreign associations beginning this year. The plan includes expanding LPG usage not only for households but also for vehicles and industrial and commercial purposes as part of a more sustainable approach on energy. “We are now formulating LPG rules and regulations in accordance with the Petroleum and Petroleum Products Law. It will reinforce foreign investment in the energy sector and support sustainable LPG development as well as expansion of LPG usage,” he said.

He said 25,000 tonnes of LPG would be distributed to the public and imports of the fuel would be encouraged to meet the growing market demand. “Domestic production of LPG is held back by limitation because of light hydrocarbon composition in natural gas and crude oil. We need to improve LPG production and distribution widely,” he said.

Only 30 tonnes of LPG are produced in domestic plants every day, and most of this supply is distributed to government officials, monasteries, hospitals and hotels. A small proportion of the domestic production is sold to private companies that have received licences A and B through a tender process.

Less than 10 per cent of the current domestic consumption is locally produced, while the remaining 90 per cent has to be imported, mainly from Malaysia, Indonesia and some other countries, said the official.

“If we can import more LPG while trying to produce more domestically, it can substitute the use of electricity in households and industries so that we can use electricity for other important sectors. As the usage of LPG increases, the price will be more reasonable, and hopefully much less than electricity tariff,” Zaw Aung said.

To date, Myanmar has granted nearly 600 LPG licences. Depending on the range of businesses, LPG licences are divided intosix kinds – from licences A to F. Licences for centralised systems in industries, condominiums and shopping malls will be granted soon.

LPG is best known as a popular cooking gas in Myanmar comprising propane and butane. Although Myanmar produces LPG domestically, demand outstrips the domestic supply and until recently, importers exclusively brought LPG into Myanmar from Thailand by truck.

A recent move by the state-owned Myanmar Petrochemical Enterprise (MPE) to lease out an import terminal at Thanlyin to locally owned Parami Energy Services Co after a keenly contested tender process has opened the door to seaborne imports.

Additionally, Nyaungdon LPG plant, three LPG shops from Yangon and one LPG shop from Hmawbi are leased to Yadana Su Co through a profit-sharing scheme. Other waterside terminal operators, including Elite Co, are poised to enter the market soon, hopefully resulting in a steady lowering of LPG domestic prices.

The government’s move to increase market access has created extended opportunities as Myanmar’s LPG consumption is very low on a per capita basis compared with other countries in the region. With reliable supply availability, demand is expected to grow, creating an opportunity for new investment and activity by existing and new players with expansion into industrial and transport markets.

Zaw Aung said an event such as the WLPGA Summit would ensure a great opportunity for government officials and industry players to share their experiences and knowledge, not only to promote LPG business but also to expand LPG usage in a safe and sustainable manner.

The two-day event included an exhibition of nearly 50 international companies and a conference programme. Organised by WLPGA, a global trade group active in 125 countries with over 260 members from the LPG value chain, foreign experts as well as equipment and service suppliers presented information about the latest market developments in other nations. Exhibitors showcased a wide range of products and services to facilitate the safe uptake of LPG in Myanmar.

David Tyler, a director at WLPGA, said the event was timely, as the Myanmar government had just opened up the LPG market with the mandate of making the fuel more widely available to consumers and industry to supply safe and reliable LPG to the household cooking and industrial heating sectors.

“There is a great deal of interest in the market development and we welcome the proactive steps being taken by the Ministry of Electricity and Energy, and MPE in particular, to encourage a safe, sustainable and reliable LPG market to develop here,” he said.

Source: Eleven Myanmar

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