YANGON -- PTT Exploration and Production, a unit of Thailand's state-owned energy conglomerate PTT, plans to invest $2 billion in the development of natural gas fields and power plant construction in Myanmar. The move will expand the company's operations in the neighboring country, which is experiencing chronic power shortages.
PTTEP received exclusive development rights from the Myanmar government at the end of December. Based on the agreement with the government, the company will produce natural gas off Myanmar's coast and use it to supply power within the country.
This project will promote the utilization of Myanmar's domestic gas and generate affordable electricity for the country, the Thai energy major said in a statement.
The project will be "our first step in extending our business along the gas value chain in Myanmar, following the 'Execute & Expand' strategy, which will drive the company toward sustainable growth," said Phongsthorn Thavisin, chief executive of PTTEP. "This project will also support the Myanmar Sustainable Development Plan and its Energy Master Plan, which aims for all households to have access to electricity by 2030."
The Myanmar government, led by State Counsellor and Foreign Minister Aung San Suu Kyi, wants to resolve the country's power shortages to improve people's standard of living and promote economic development by attracting manufacturers. PTTEP's investment will provide a boost to the country's effort to expand its power generation capacity.
PTTEP's $2 billion investment plan includes the development of natural gas fields off Myanmar's coast, the construction of a gas-fired power plant with a generation capacity of about 600MW, a 370km pipeline from the gas field to the power plant, and a transmission line from the plant to Yangon. The power plant will be built about 60km southwest of Yangon, the country's largest city.
PTTEP plans to finalize its decision on the investment in early 2022 after conducting a detailed study, the company said.
There are currently four offshore gas fields in Myanmar, and PTTEP holds an 80% stake in one of them, which is already in operation. It holds an 80% stake in another block that it is developing with Japanese energy development company Mitsui Oil Exploration, which holds the other 20%.
Natural gas is a precious energy resource for Myanmar, but until now the country has exported 70% to 80% of the gas it produced to Thailand and China. When domestic power demand was lower in the past, the military government of the time signed long-term supply contracts with two neighbors. The government used gas resources as a means of obtaining foreign currency.
As urbanization and industrialization moved forward, hydroelectric power, which had previously been the main domestic power source, could no longer keep up with domestic demand.
To solves its power shortages, the country decided to start importing liquefied natural gas in 2020. That year, the government granted similar exclusive rights to a consortium of three Japanese trading companies, including Marubeni Corp., to develop an LNG-fired power plant with a capacity of about 1,250MW.