YANGON -- Myanmar's government on Friday gave written approval to plans by three Japanese trading companies to build a liquefied natural gas power plant.
Representatives from Marubeni, Sumitomo Corp. and Mitsui & Co. attended the signing ceremony in the capital Naypyitaw. Nikkei reported earlier that the proposed 1,250 megawatt plant is equivalent to about a fifth of the Southeast Asian country's existing power generation capacity.
Sources said the next steps -- which include creating detailed plant designs and negotiating on power pricing with a local utility -- will take 18 months to two years.
Construction is expected to take two and a half years, so the plant would become operational around 2025. How smoothly the pricing negotiations progress will be crucial to whether the $1.5 billion to $2 billion project remains on schedule.
"The ministry will cooperate for the smooth and speedy completion of these works," said Win Khaing, Myanmar's minister for electricity and energy, at the ceremony, adding that it would try to create a "win-win situation" for the power purchase agreement.
The power station will be located in a port area near the Thilawa Special Economic Zone on the outskirts of Yangon. The three Japanese trading companies will form a joint venture with local conglomerate Eden Group to build and operate the plant.
A terminal for offloading ship-borne LNG will be built at the same time.