Myanmar gas deal to benefit Thailand

Construction News Myanmar
A deepwater offshore oil rig and accompanying support vessel

Myanmar gas deal to benefit Thailand

17 December 2019

A new cooperation deal between the Myanmar government and private energy company, MPRL E&P, will bring good news for Thailand’s power generation sector, Myanmar’s Ministry of Electricity and Energy said in a statement on Monday.

The statement was issued after MPRL E&P, a Myanmar-based independent energy company, successfully concluded negotiations with Yangon on two key agreements on fiscal terms and the sharing of output from the A-6 offshore gas bloc in Myanmar.

MPRL E&P is the only independent energy exploration company in Myanmar which actively explores both onshore and offshore wells in the country.

In the statement, MPRL E&P said the talks resulted in a number of improvements in negotiating terms, which will be crucial to the economic viability of the gas exploration project, which is located in deep waters off the Myanmar coast.

“While Thailand’s power generation is fairly balanced on a basket of mainly domestic resources, outputs of these resources — in particular, gas — have been dwindling by about 3.5% per year on average over the last four years,” the statement said.

“Meanwhile, electricity consumption remained fairly stable over the same period, because of slower economic growth and wiser power usage.”

The statement went on to say that while gas still accounts for more than half of the fuel used in Thailand’s power stations, over the years Thailand has had to import gas from abroad as output from fields in the Gulf of Thailand decreases.

Much of the growth in gas consumption in Thailand was, and still is, fuelled by gas imported from Myanmar, which accounts for about a quarter of the total gas consumed, it continued.

However, the three main wells where Thailand gets its gas from — Total’s “Yadana”, Petronas’ “Yetagun”, and PTTEP’s “Zawtika” — are no longer churning out gas at an optimal rate.

Yetagun is known to be in terminal decline, while Yadana is expected to enter terminal decline in the near future.

On account of this shortfall, efforts have been made to import liquefied natural gas (LNG) from expensive and faraway sources.

In light of these conditions, MPRL E&P’s CEO, U Moe Myint, said that the A-6 bloc could help mitigate the problem and extend supplies for a few more decades.