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PTTEP to raise investments in Myanmar offshore projects to maintain gas production

Since 2014, a total of 345 million cubic feet of natural gas for daily domestic consumption and export to Thailand is channeled from the offshore Zawtika Project in the Gulf of Moattama to the Zawtika Operation Center (ZOC) in Kanpauk Township, Tanintharyi, said Mr Piya Sukhumpanumet, general manager of PTTEP Myanmar Assets.

Natural gas, which is produced at the Zawtika field at Block M9, is being processed at the Zawtika Platform Quarter Complex at the project site and transferred via a 230-km subsea pipeline to ZOC.

Located approximately 300 kilometres south of Yangon, the Zawtika gas field development project is being developed by Thailand’s PTT Exploration and Production Public Company Ltd (PTTEP). The company also owns an 80 percent stake in the project, while state-owned Myanma Oil and Gas Enterprise (MOGE) owns the remaining 20pc. A production-sharing contract was signed in 2003 and gas was discovered at M9 in 2007.

Under that contract, around 70pc of the natural gas channelled to ZOC is rerouted to Kanchanaburi, Thailand. The remaining gas is channelled to Myaing Kalay near Hpa-an, Kayin State, and converted into electricity for domestic consumption.

To maintain the current volume in the future, there are plans to raise PTTEP’s exploration and production efforts within the Zawtika Project area, said Mr Sukhumpanumet. On January 22, PTTEP announced that it would invest around US$3.3 billion globally and allocate around US$1.2 billion to the S1 Project, the Bongkot Project, the Arthit Project, and the MTJDA Project in Thailand as well as the Zawtika Project in Myanmar.

The company currently has five projects in Myanmar. The first is the Zawtika project in the M9 offshore block which has started producing gas. The second one is in the M3 block which is in development stage. The remaining projects: MOGE-3, MD7 and M11 are in the exploration stage.

PTTEP will also participate in Myanmar’s offshore oil and gas tenders, which will be held later this year, when the Ministry of Energy and Electricity (MOEE) will invite international tenders for up to 31 oil and gas exploration fields.

In December, an MOEE official told the Myanmar Times that the ministry is now revising the terms and conditions of production-sharing contracts that will be offered to the winning bidders in the tender exercise. These include sharing on a 50-50 basis compared to previous contracts stipulating that production would be shared on a 65percent/35pc basis in favour of MOGE.

Once the revised terms are ready, they will be submitted to the Cabinet and the President’s Office for approval.

“Improving the existing production sharing contract terms will be crucial for Myanmar, as Nay Pyi Taw seeks to attract more investment into the oil and gas sector while reducing the growing strain on depleting domestic oil and gas reserves,” according to a January 2 report by Fitch Solutions Macro Research.
natural gas
The last round of exploration and production tenders in Myanmar was held under the former government in 2014. Myanmar also has 17 PSCs that were awarded as part of the 2014 onshore and offshore bidding rounds, where drilling and seismic works have yet to begin. This will take place over the next two years, according to contract terms.

The Thais have allocated a US$16 billion budget towards expanding its exploration and production activities and building up more oil and gas reserves between 2019 and 2023.

SOURCE: MYANMAR TIMES

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