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Myanmar inks two electricity deals with Chinese LNG plants

The Myanmar government has signed two power purchase agreements (PPA) to buy electricity from two liquefied natural gas (LNG) plants totalling 580
megawatts.The project company of CNTIC VPower Group inked two five-year PPAs with the Ministry of Electricity and Energy’s Electric Power Generation Enterprise (EPGE) on June 26 for the plants in Thanlyin, southeast Yangon, and Kyaukphyu, central Rakhine.

In a July 2 announcement on the Hong Kong Stock Exchange, VPower said the two projects had started operations on June 30. Tariffs and other details have not been
disclosed for either agreements.

The energy ministry’s deputy permanent secretary U Soe Myint said last month that the government would be paying around US$0.12 per kilowatt-hour.
The Myanmar Times has contacted VPower for comments on the operation details.

CNTIC VPower Group is a joint venture between VPower Group, a Hong Kong-listed company backed by CITIC Group, and Chinese state-owned China National
Technical Import & Export Corporation (CNTIC). The group won all three “emergency” LNG projects rushed out by the energy ministry a year ago.
These are the second and third PPAs signed between the consortium and the government. The first one, for a 400MW LNG plant in Yangon’s Thaketa, was signed on June
10. It started commercial operations on June 14, according to VPower, using LNG imported from Malaysia via cargoes arranged by Petronas.

The three LNG plants, with a combined installed capacity of around 1000MW, are expected to generate the equivalent of around one-third of Myanmar’s existing dryseason grid electricity and help narrow the widening energy deficit. The energy ministry last year promised to end power cuts this summer.

But all three plants are months behind the April 3 implementation deadline, which according to the tender document would have incurred a massive penalty. In early
April, a VPower spokesperson attributed the delay to the COVID-19 outbreak, which the spokesperson said had set back the supply of construction materials for the
plants.

Neither the government nor the companies have revealed whether those penalties are included in the deals.
The government also tendered two emergency gas projects alongside the LNG schemes. The two gas plants, located in Kyun Chaung and Ahlone townships, were secured
by VPower and Chinese state firm CEEC (Energy China), respectively. To date, no PPA has been announced

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Source : Myanmar Times

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