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It drives industry; it brings production to a halt. It links remote villages to the modern global village; it leaves families homeless when lands are taken for facilities. It is a jackpot for investors in oil and natural gas; it is a drain for those buying charcoal or firewood. It is a way out of poverty; it's what keeps so many in poverty. it’s about cleaner sources; it’s about environmental devastation. It’s about long-term investments; it’s about daily struggles. It’s plentiful; it's rare. It's low-cost; it’s too much to afford.
Energy in Myanmar is a national issue. For too many, however, It's also very personal. No other single topic is as broad or far-reaching. While everyone complains about the insufficient supply, though every attempt to fix the issue – higher prices to boost funding, expanding facilities to boost supply – seems to bring on further controversies. One thing is certain: The situation is changing every day. The grid is expanding; investment is pouring in; plans are being made. While it’s impossible to gather comprehensive statistics in such a fast-changing environment, in these pages we’ve set out to summarise the facts at a glance. And in the pages that follow, we look at how people at all levels of society are working to see their way forward to a brighter future.
A composite image assembled from data acquired by the Suomi NPP satellite in April and October 2012 shows Myanmar and surrounding countries at night. Photo: NASA Earth Observatory/NOAA NGDC
<1% 75% 19% 2030 $44 million
Population of Myanmar with reliable, consistent access to electricity1 Population without any access to electricity at all1 Global population without any access to electricity at all, as of 20091 UN's goal for universal energy access worldwide1 Spending required yearly for Myanmar to reach this goal - 1/10th its GDP1
Electricity generated nationwide, in GWh3
35000 30000 25000 20000 15000 10000 5000 0 2009 2010 2011 2012 Estimated potential
The grid – the developing choice Percentage of population on national grid in 2013 13% Percentage of villages on the grid (4550 of 65,000) 7% lectricity generated that is lost in transmission and distribution due 25%
to “outdated and limited voltage power transmission capacity of existing networks”1
8.5% $595 2012 2.45m
Planned growth per year of the national electricity grid, according to national targets1 Estimated cost per household of national grid connection1 Installation of nation’s ﬁrst digital electricity meters, in Nay Pyi Taw’s Lewe township2 Analogue electricity meters in Myanmar, August 20122
Electrification rates, 2014
National average Mandalay Kayar Nay Pyi Taw Yangon 0% 10% 20% 30% 40%
Hydroelectricity – the long-term choice Estimated achievable hydroelectric potential realised so far <1% Electricity generated by hydroelectric in 2012, vs 1995 when 50% of 71%
electricity was gasﬁred3
Decrease in total generation during dry season, May vs October 20121
Solid fuel – the no-other-choice Population depending on solid fuel such as wood, rice husks, 95%
charcoal for cooking and heating1
50% 60% 70%
39% 233 270,000 14 times 9 times
Energy A Myanmar Times special report March 2014 Editors Myo Lwin, Wade Guyitt Sub editor
Global population depending on solid fuel for cooking in 20091 Hours each year an average rural resident spends collecting ﬁrewood1 Acres of forest lost each year due to logging exceeding reforestation1 Increase in ﬁrewood price in Yangon, 1988-20041 Increase in charcoal price in Yangon, 1998-20041
Consumption by city, 20133, 5
Writers Soe Myint, Sandar Lwin, Aung Shin, Mya Kay Khine Soe, Wade Guyitt, Rosie, Myo Lwin, Hein Htet Aung, Aung Kyaw Nyunt For feedback and enquiries firstname.lastname@example.org email@example.com Photography Kaung Htet, Boothee, Zarni, Aung Htay Hlaing, Wade Guyitt
Mya Kay Khine Soe Design Khin Zaw, Ko Htway, Zaw Naing Soe Cover photo Aung Htay Hlaing
Oil – the crude choice Date Burma exported its ﬁrst barrel of oil, making it among the 1853
world’s oldest oil exporters4
53 52 50m
Onshore blocks in Myanmar1 Oﬀshore blocks in Myanmar1 Barrels of known reserves9
Coal – the dirtier short-term choice Tonnes of coal produced in 2011, 52% used by industry1 692,000 Natural gas – the cleaner short-term choice Nation’s natural gas production happening at Yadana and Yetagun, 95%
with nearly all being sent to Thailand
Value of known reserves of 20 trillion cubic feet at current prices10 Value of speculated reserves of 80tcf at current prices10
Nuclear – the abandoned choice Agreement with Russia to build nuclear research reactor near 2007
“[The program] stopped because it did not have suﬃcient resources and worried that the international community would misunderstand.” - Minister for Science and Technology U Aye Myint, to Pyithu Hluttaw, September 232
Off-grid – the alternative choice Households in Myanmar dependant on diesel lamps, batteries and 70%
candles for lighting1
$9-12 1 $70-$450 80% $2000
Average household monthly spending on candles and batteries, out of an average monthly income of $401 Months before solar-powered lanterns and torches pay for themselves1 Cost of “mini hydro” facility to power 50-100 oﬀ-grid homes1 Percentage of the estimated 1200 biogas facilities nationwide which are no longer in operation1 Cost of community biogas facility to support 300 houses1
Demonstrators arrange candles into a map of the country around a note saying "Give the whole nation of Myanmar electricity", on May 23, 2012. Photo: Ko Taik
1. Accelerating Energy Access For All In Myanmar, United Nations Development Programme, 2013. Online: http://www.mm.undp.org/content/myanmar/en/home/ library/environment_energy/publication_1/ 2. The Myanmar Times. Online: http://www.mmtimes.com 3. http://www.slideshare.net/VikasSharma128/myanmar-electricity-industrydec2013 4. http://www3.weforum.org/docs/WEF_EN_NewEnergyArchitecture_Myanmar_2013.pdf 5. http://www.kpmg.com/MM/en/IssuesAndInsights/ArticlesPublications/Documents/ Infrastructure-in-Myanmar-update-29Oct.pdf 6. Electrical Industry of Burma/Myanmar: Online Compendium, 4th edition, April 2012. Online http://en.convdocs.org/docs/index-18543.html?page=167 7. http://www.dvb.no/news/pttep-plans-us3-3-billion-oil-and-gas-investment-in-burmaburma-myanmar/37774 8. http://usa.chinadaily.com.cn/business/2013-10/20/content_17046790.htm 9. http://dupress.com/articles/asia-paciﬁc-economic-outlook-february-2014-myanmar 10. http://countingpips.com/forex-news/2014/02/myanmars-untouched-natural-gasreserves/ Photos: Staﬀ, except where noted; 11 AFP
Foreign investment – the necessary choice World Bank’s planned investment in Myanmar’s power sector $1b 5-year investment, equalling 20% of total expenditure, by Thailand's $3.3b
PTTEP, which provides 27% of Thailand's energy7
100 times 22m
Growth projected in industrial power consumption for 2014 in Guanxi, one of 3 provinces in China fed by new 2520km Shwe pipeline from Myanmar8 Tonnes of crude oil heading to China annually via Shwe pipeline, over 10 times the amount staying in Myanmar8
Shwe project gas pipelines to China are laid down over Daw-na Mountain in Rakhine State in late 2012. Photo: Ko Taik
What's to come
– and what to do in the meantime
Thirty shortlisted bidders – mostly from the US, Canada, Europe, India and Australia – are in the running for 11 shallow- and 19 deepwater blocks, with winners to be announced any day now. But a deepwater discovery could take 5-7 years, and shallow-water blocks could take 3-5 years. So while additional natural gas reserves will become available, it won't be until 2020-25 – or beyond. The shortfall of natural gas in the meantime calls for either orere expedited onshore exploration or for alternative fuels other than natural gas to be developed in order to meet the shortfall. Energy planners will have to give serious consideration to this timeframe when planning the nation's future electricity generation mix.
In the pipeline
A former director general of the Energy Planning Department charts the past and the future of Myanmar’s oil and natural gas industries
SOE MYINT firstname.lastname@example.org
rilling for oil is a part of Myanmar's heritage. People have searched for oil here and used it as either a preservative or a lubricant since at least the reign of King Min Khwe Chay in Bagan during the 11th century. Until the early 19th century, drilling rights passed down between 24 twinzayo – 18 men and 6 women who formed a hereditary monopoly controlling the principal oil-bearing area near Yenangyaung in Magwe Region. But following the establishment of the Burmah Oil Company, a UK company, in 1886, more than a dozen Anglo-Indian, Chinese and Indian companies followed suit. Together, these foreign companies took production away from local control, but also launched a ﬂourishing modern petroleum industry that powered the British empire. In 1954, the then-government became a 33-percent shareholder in the BOC (1954) Co Ltd; in 1961 it acquired a 51pc share; and on January 1, 1963, it bought out the BOC’s remaining local assets for K62.5 million. The oil industry became a national heritage industry once more, staffed with and run by Myanmar nationals under the Myanmar Oil and Gas Enterprise (MOGE). During its heyday from 1963 until 1985-86, the MOGE expanded on the BOC's legacy, employing as many as 15 geological ﬁeld parties, 4 gravitymagnetic survey parties, 3 seismic survey parties and 45 drilling outﬁts in the quest to discover new energy sources beneath the nation’s feet. Natural gas in the mix New discoveries followed: Mann, Htaukshabin/Kanni, Thargyitaung and Kyaykkwet/Letpando in central Myanmar; Pyay, Myanaung and Shwepyitahr; and Payagon, Nyaungdon and Aphyauk in the delta. Production reached heights of 32,000 barrels of oil per day (bpd) in 1985, as well as 180 million cubic feet per day (mmcfd) of natural gas in 1998. But afterward onshore production began to dwindle, with yields measuring only 6000bpd of oil and 60mmcfd of natural gas. The nation needed to look offshore. In the early 1970s, Myanmar invited foreign companies to conduct offshore petroleum exploration and production (E & P). The bid was unsuccessful, so in the 1980s Myanmar went offshore itself. Funded by a loan from Japan, the endeavour led to the 1983 ﬁnd of the Yadana natural gas ﬁeld. At ﬁrst, low initial gas reserves estimates – of 2.6 trillion cubic feet (tcf) – and changes in government policy retarded the development of Yadana by the MOGE. But in the early 1990s Myanmar again invited foreign companies for E & P both on- and offshore. Offshore discoveries were made of natural gas at Yadana by Total Myanmar E & P, and at Yetagun by Texaco/Premier. Onshore efforts were less successful. A round of petroleum E & P in the early 2000s, however, was another huge success, with ﬁnds in the Shwe gas ﬁeld by Daewoo, the Zawtika gas ﬁeld by PTT and the Aung Thein Kha gas ﬁeld by PTT in 2011 (ﬁrst yields expected by early 2018). Current prospects Recent calls for on- and offshore E & P saw an inﬂux of international interest, from the USA, Canada, Australia and European nations among others. For onshore, 18 contracts are to be signed with 10 companies, in addition to the existing 11 contracts. For offshore, in addition to 12 contracts for producing gas ﬁelds and E & P blocks, several deepwater and shallow-water blocks are to be awarded soon. Opportunities for local companies to become E & P players are now wide open. The future of offshore Myanmar already has three gas ﬁelds producing offshore. The Yadana gas ﬁeld has reserves of gas-in-place 6.5 trillion cubic feet (tcf) and Total is pursuing the eastern part of the ﬁeld. But Yadana is already halfway through its lifespan, having been producing since 1998. Exploration is underway in the satellite areas of the Yetagun gas ﬁeld, with gas-in-place reserves of 3.2tcf. Yetagun started its gas export in 2000 and is almost halfway through its ﬁeld life. The Shwe gas ﬁeld, with gasin-place reserves of 4.5tcf, started commercial gas production in June 2012. The contracted Daily Contract Quantity is 500mmcfd but is still ramping up, producing 200mmcfd. Myanmar is siphoning about 200 mmcfd from Yadana for domestic use and will be taking 100mmcfd when Shwe starts producing 500mmcfd. Yetagun does not have an obligation to supply to the domestic market, according to the Export Sales Gas Agreement. Zawtika, with gas-in-place reserves of 1.2tcf, will soon produce 300mmcfd, one-third of which will be allocated for the domestic market. Aung Thein Kha, with over 1tcf, is scheduled to have its ﬁrst gas by 2018, aruond 100mcfd, all for the domestic market. Future offshore potential from existing ﬁnds could come from CNOOC's gas discovery at M-10 and MPRL’s announcement of a gas ﬁnd in Pyithar. Both should yield production around 2020, beyond which Myanmar can likely expect further ﬁnds from new shallow-water and deepwater blocks.
Oﬀshore natural gas slated for domestic use
2014: 200 mmcfd from Yadana 100 mmcfd from Zawtika (early 2014) 100 mmcfd from Shwe (late 2014) 100 mmcfd from Aung Thein Kha
2020: 100 mmcfd from M-10 (must negotiate with CNOOC for early development or relinquish)
The government allows partnerships with foreign companies for onshore and offshore shallowwater blocks, and is not restricting the balance of shares between local and foreign parties. This unprecedented opportunity will allow a few lucky local companies – of the more than 160 – to carry on Myanmar's national heritage of oil operations, just as the twinzaya families did in the olden days.
The future of onshore From 1963 to 2013. the MOGE's onshore ﬁnds amounted to about 1.8b barrels of oil equivalence in the Central Myanmar Basin, the Pyay Embayment and the Delta Basin. Yet production came to just 432mboe, or 24 percent. Recovery factors still have much room for improvement. Efficiency aside, to date the MOGE has identiﬁed and investigated some 14 sedimentary provinces onshore with the potential to generate and accumulate petroleum, with more favourable provinces yet to be investigated. And among those investigated, not a single province has yet been comprehensively explored. Many more investigations are yet to be made with more advanced techniques and better drilling technology, which will allow exploration of ultradeep and/or high pressure/high temperature wells. Myanmar already has evidence of huge oil deposits in Yenangyaung, Chauk, Mann and Htaukshabin/ Kanni, as well as signiﬁcant onshore natural gas deposits in Payagon, Aphyauk and Nyaungdon. Future oil seekers, armed with geological studies and advanced technologies, are bound to make more discoveries.
U Soe Myint joined the Ministry of Energy as a geologist in 1962. He served as Director General for the Energy Planning Department from 1995 until 2008. He is now Executive Directorof Machinery & Solutions Co Limited and also serves as president of the Myanmar Geosciences Society.
U Aung Kyaw Moe
The buzz over electricity
Electrician, Yankin EPC
U Kyaw Win Hlaing
Engineer, Apex Marine Co
U Wai Lin
Technician, Eskala Hotels otels in Ngwe Saung use generators for power. Most hotels have two generators, as well mechanics ready to repair them. But also villages in Ngwe Saung have individual generators. About one in 20 houses uses a solar panel system. The Fire Department trains hotel staﬀ to prevent ﬁres. Some hotels hire trainers from private security companies to train their staﬀ. Hotels drive generators for 24
ost shocks come from service wires and home meter boxes. They can be dangerous if not repaired by skilled mechanics. I have seen ﬁve electricians die during my career. When repairing power lines, the main board should be turned oﬀ, to halt the ﬂow, because we can’t see when it’s ﬂowing just by looking.
’ve served on ships three times, and each time saw beautiful lights in other countries when our ships reached ports. Power is important for a country because most criminal cases occur when it is dark. If lighting is not good enough, crimes can happen more, because criminals love darkness. For crime to be eradicated, power is essential.
One person’s trash is another’s electricity
With the help of private companies, Yangon aims to solve two of its biggest problems at once
OO much garbage, not enough energy – Yangon’s power shortages continue to plague its 4.7 million residents, while the over 1500 tonnes of waste Myanmar's largest city generates each day threatens to overwhelm its landﬁlls. Fortunately, the municipal authority has hit on a way to solve both issues at once: Announced last year, two new waste-to-energy facilities will turn Yangon’s castoff rubbish into energy for the national grid. It's too early to announce exact start dates, but both projects are currently under construction at two of the city's garbage collection sites. There are several ways of turning waste into energy, but the most popular are methane gas extraction at the landﬁll, to create compressed natural gas (CNG), and heat extraction through incineration, to drive steam turbines and generate electricity. The basic principles of each method are employed in similar ways around the world, though details do vary from plant to plant and most of them are trade secrets. Still, a general survey of each of them can help make sense of just where that electricity is coming from when we ﬂick on the switch. “We chose two proposals using different principal methods out of 43 proposal submissions to our waste-to-energy project tender,” said U Aung Myint Maw, assistant chief engineer at the Environmental Protection and Cleaning Department, part of Yangon City Development Committee (YCDC). Successful bidders Zeya & Associates Co Ltd will incinerate waste for commercial electricity generation in Dawai Chaung in North Dagon township, while South Korea’s Chasson International will build a power plant at Htein Pin in Hlaing Tharyar township and drive it using the “Sanitary Landﬁll Method” of methane extraction. The ﬁrst requirement of the extraction method is a very large hours when they’re crowded with guests, but some hotels shut down the air conditioners during the day when guests go to the beach, to save electricity.
pit. While the exact measurements for Htein Pin weren’t available from company officials, who had returned to South Korea and were not able to respond by press time, U Aung Myint Maw said more than half the existing space is available. “Htein Pin garbage collection site is 150 acres wide, and 70 acres of this has been used. The pit will be dug in the remaining 80 acres.” He added that the biological make-up of most trash here makes it well-suited to the process.
its contract YCDC has to send 800 tonnes of garbage to Htein Pin and 600 tonnes to Dawai Chaung each day. Plastic, which won’t break down the way organic waste does, will be handpicked from the mixed rubbish before the waste is dumped into the pit. The plastic will be recycled into polyethylene seeds onsite at a separate special facility. Then the remaining garbage is thrown into the pit and
be seen through the glass wall of the control room. When we have built the plant, we will invite observers and the media to visit,” said assistant general manager U Pyi Sone Aung. The contracted 600 tonnes a day will be carried in by YCDC trucks, weighed and then thrown into four pits of around 1000 square metres (10,800 square feet) each. “The garbage will be lifted with a hook and transferred to the tank where it will be washed with water
How the proposed waste-to-energy incineration facility will operate at Dawai Chaung, North Dagon township. Photo: Supplied
“According to Myanmar people’s eating habits, 78 percent of the garbage is organic. That’s very good for micro-organism proliferation. Without any special treatment, the garbage pile will reach a temperature of 68 degrees Fahrenheit [20 Celsius] and produce methane,” U Aung Myint Maw said. First the pit will be covered with a special layer called a “Geo Membrane” to protect it from polluting groundwater. Then, once the gas-collecting tubes and pipelines are set up along with the processing equipment required for collecting and cleaning leached materials, the process can begin. “First of all, the truck-load of garbage is weighed,” U Aung Myint Maw said. Weighing the garbage is important because according to cafés use generators. And with condo buildings being ﬁnished, we see more demand for big generators. Not small ones, though: A year ago demand was 100 per weekend, but now it’s only 10. For rural residents, solar electric things are more in demand now, so they don’t have to pay for fuel. Currently our business is focused not on generators but on construction machines, because there is more power. – By Aung Kyaw Nyunt, translation by Mya Kay Khine
compressed by compactor trucks which drive to and fro across the pile. At a suitable thickness of garbage, a layer of soil is added, and then more garbage, until the pit is ﬁlled up layer by layer. Gas is collected as it's produced by the garbage's natural decomposition. When the pit is full, it is covered with a thicker layer of topsoil on top. At this point, it’s safe for reuse for public re-use, for ﬁelds or even golf courses. At Dawai Chaung, in north Yangon, Zeya & Associates Co Ltd, along with partner ﬁrm Hyundai Rotem and other international investors, will build two incinerators and electricitygenerating plants. And while many companies claim to be transparent in their operations, this facility plans to take that literally. “All the machines and steps can
to remove earth and compost. A huge amount of water is needed and we will use underground water,” U Pyi Sone Aung said. The wet garbage is the poured into the incinerator’s big funnels.
Inside, shaking sieves will separate the trash step by step, as people in Yangon throw away waste without separating items by material ﬁrst. “For intermediate-level technology, trash needs to be sorted into types, such as bottles, glass, metal, plastic and so on. Later, advanced technology will allow everything to be incinerated together. Even iron can be incinerated," U Pyi Sone Aung said. “As the trash is mixed, our partner Korean experts had to seek new procedures to incinerate them. That’s why the cost of the project gets high, up to US$100 million. But the experts said that the waste’s power productivity is very good,” he said. The raw heat generated will be used to drive a steam turbine generator. Ash, and anything else that can’t be burned, will be collected at the end of the process. “Ash is about 10 percent of the garbage and we will manage it according to YCDC’s instruction,” U Pyi Sone Aung said. “The dirty water that washed the garbage is treated so it’s clean and will be released into the nearby stream. The smoke also will be treated with several ﬁlters,” he said. Once both projects come online, the incineration-driven steam turbines will produce around 15.4 megawatts per hour, while the methane from the decomposing landﬁll will generate about 12MW/ hr for ﬁrst year and 10MW/hr in the second and third years. The electricity produced at both will be added to the national grid.
U Zaw Lin Win
Manager, A1 Generators showroom
e used to have more demand for generators but right now the demand is dropping. People don’t buy generators if the power is oﬀ only one day per week. But lighting shops, photocopy shops and internet
Graffitti on Pyay Road near Parami. Photo: Wade Guyitt
Bright lights, big city
Lacking historic buildings, the capitol makes its statement with lighting instead
Mya Kay Khine
Photographers and the public loved them. I didn’t know it at the time, but many lights in the new capital were installed by one company: Krislite, a Singaporean company, which opened an office in Myanmar in 1994 and distributes its products here via Lighting Specialist Co Ltd. As well as selling lighting products to private homes and business, Krislite has partnered with the government on many large-scale projects, particularly in Nay Pyi Taw: the parliament buildings, the SEA Games facilities, Uppatasandi Pagoda, half the roads: these and other well-known sites in the country's capital are lit by Krislite’s products. “To become a great metropolis, there must be not only good roads but also bright lights,” says managing director U Kyaw Moe Naing. “Nay Pyi Taw is a new city and it is powered in every district and sector. For example, every road is ﬁxed with overhead cables and problems won’t easily arise.” In Nay Pyi Taw, all buildings – government offices, hotels, shopping malls – are lit up brightly to enhance the beauty of the city. To see Yangon’s lights at night, the best way is to go down to Yangon River and look from far away. From there you can pick out the lights of hotels, shopping centres, parks and even houses. And brighter than anything else around are the lights of Shwedagon Pagoda – thanks to the four yellow-ﬁlter ﬂoodlights, which cost US$1000 each when Krislite installed them in 2002. U Kyaw Moe Naing said that Krislite is now in talks with Yangon Heritage Trust to help put the spotlight on other famous structures in the city, such as its one-of-a-kind colonial-era buildings. “In some places of Yangon
Photo: Supplied Krislite has lit many of Nay Pyi Taw's sites, including the Lotus roundabout (above), parliament (top left) and streets.
HEN I lived in Nay Pyi Taw in 2007, there was no Water Fountain Garden, no Zoological Gardens, no Safari Park. But there was one thing that made me love it: the lighting. Before 6pm, the sidewalks were like a desert, but once the workday ended the roads were crowded with pedestrians. Things were brightly lit, making everyone feel safe. And the rows and rows of streetlights made for a relaxing sight after a long day.
power is supplied systematically, but many places are not,” he says. “If the power supply was better in Yangon also, it would be incredibly beautiful.” But he adds that to light all of Yangon like Nay Pyi Taw would present special challenges. “Starting fresh is not same as repairing. Creating new streets and lighting starts systematically and is very easy. But when repairing a street you can encounter some restrictions. If one road has to be rebuilt, it’s going to damage surrounding places. We must recognize these issues and study them to understand them fully.”
Let there be light at the 38 Street night market
HE electric lights used by the ﬁsh, meat and vegetable sellers at Yangon’s 38th Street market started with one brilliant idea. “I began this roughly three years ago,” says U Kyaw Kyaw, “because I needed to have lights for my restaurant.” “This” is a generator, which he brought and installed near his street stall to promote his business and help his customers see what they were doing after dark, since there was no adequate street lights. Others around him immediately wanted to show off their wares this way also, so since the generator offered enough power to supply a household of four, U Kyaw Kyaw decided to offer electricity to his fellow vendors. He rents about 30 bulbs, and charges K300 for one or – a special
HEIN HTET AUNG
Lit by bulbs powered by a nearby generator, customers shop at Yangon's 38th Street market. Photo: Zarni
deal – K500 for two. “I bring the lightbulbs and then at around 5pm I start to place the wires all over the bazaar.” The bulbs hang from two-foot poles he provides. “The wire system is safe because I put the wires above the ground,” he says. “It’s very convenient,” says Ma Phyo Chit, who sells ﬁsh jerky and rents a bulb for her stall. “Before Kyaw Kyaw, we just had to use our own battery-powered lightbulbs. In Yangon, it is not easy to use such batteries.” U Kyaw Kyaw says his earnings cover the cost of a gallon of fuel – K4500, lasting two nights – and also allow some proﬁt. His fellow venders agree. Daw Win Mar used to use candles, she says, but they made her vegetables appear dim and didn't show off their true colours. Now, thanks to U Kyaw Kyaw’s bright idea, her displays gleam just as they should.
What's the state of the sector today? In recent onshore bidding, the government awarded 16 blocks to 12 companies. Now everybody is waiting for the announcement of the winners of the historic offshore bidding rounds. We have big national oil companies (NOCs) and international oil companies (IOCs), all aggressively competing for both shallow-water and deepwater blocks. Bangladesh and India started open bidding after Myanmar, but I’m told they’ve attracted few international players. This is the time for Myanmar's oil and gas to regain former glory in a big way. In 2009, exploration spending alone was around US$300 million. Last year it was almost $1 billion. With the new wave of investment, we expect the market will grow into the multiple billions, making Myanmar a key regional player in the upstream sector. Yours is one of the few local companies involved in oil and gas business. Can you tell us about competing with fellow nationals as well as foreign giants? Locally, we have a very limited number of players spearheaded by the Myanmar Oil and Gas Enterprise (MOGE). But we are quite far behind in terms of technology and project management. The only way to catch up is to encourage local companies to form joint ventures with foreign companies, to build capacity and transfer technology and knowhow. Until then, local companies are focussing on less value-added segments such as logistics, catering, local support etc. They compete aggressively, but for less than 5 percent of the market. If Myanmar companies can capture the value-added segments
‘Not just hype’
Ken Tun, CEO of the Myanmar-owned and operated Parami Energy Group, sits down with editor Myo Lwin to give his perspective on the energy rush
of the market, taking up to 30pc, the oil and gas service sectors alone could contribute more than 5pc of GDP as direct income. Norway used a similar strategy, leveraging its oil and gas to boost its global position. What are the pressures right now in the big-money game? To sustain our business, we cannot afford to limit ourselves to Myanmar in the long run. The ASEAN Economic Community (AEC) is not a joke: It is coming. As chair nation of ASEAN in 2013 we need to tell the world we really mean it. Regionally, and globally, if we are not competitive we won't survive. We cannot hide under government protection. We need to rely on ourselves. The stresses come from ﬁnding good partners, maintaining good people, training them, and attracting talented people, local or expat. We have to empower manner. I wish to see more people – the experienced and the youthful – joining national energy management committees (NEMCs) so that we can come up with a robust and sustainable national energy master plan. The government should not delay developing the MOGE into the main vehicle, or hero, for developing the energy sector in Myanmar. Revenues of gas exports should help drive national capacity-building. What is your opinion on the Myitsone dam project? Should it have been halted instead of suspended? Personally, I think the present government delegated the decision because it is a complicated issue with no easy short-term solutions. It started before the current government and it was a bold step by U Thein Sein’s government to
There are 5 bilateral power grids trading over 2500MW in ASEAN, and 11 bilateral gas pipelines. Asia currently commands 28pc of world GDP, and it will command an estimated 52pc by 2030. More than half the world’s energy demand will come from Asia after 2030. But locally only 30pc of the population has access to grid electricity. Sufficient and reliable electricity is critical for the industrial sector and for foreign
In a recent ranking of generosity among the countries [World Giving Index 2013; available https://www. cafonline.org/publications/2013publications/world-givingindex-2013.aspx], America ranked highest, followed by Myanmar which tied for second place. I believe we can score even better. Myanmar people are famous for giving even when they don't always know what they'll be having for breakfast tomorrow, but Western people score better in term of making their donations sustainable. We need to learn from the West how to donate responsibly and make sure our CSR works beneﬁt society in a sustainable way. At Parami Energy, we try to avoid ceremonial donations and don't channel aid through brokers. Instead we engage. We invest heavily in education through our rural monastic schools program where we help rural kids who are the poorest of the poor get an education. We bring access to clean water for hospitals. We also engage in green activities. We are committed to planting 500,000 trees by 2015. That energy enables us to overcome the challenges we are facing now. What would you like to advise foreign energy companies about doing business here responsibly? First of all, Myanmar is not just hype. Myanmar has strong fundamentals for any business to come and invest. But success has two major ingredients. The ﬁrst is getting a good local partner who understands the system and the people. The second is thinking long-term and investing in society. Those with long-term views will ﬁnd great successes here. Around 90pc of Total’s workforce here are locals. Daewoo helps build roads and schools. PTTEP helps people with training and education, and by building schools. Petronas puts Myanmar students through university. There are still lots of opportunities to be CSR role models in Myanmar, such as training local businesses on compliance and ethics. A competent workforce will help you achieve sustainable success.
More than half the world's energy demand will come from Asia after 2030 ... Sufficient and reliable electricity is critical.
them to make good decisions, acquire capabilities through tech transfer and knowhow, and manage joint ventures with world-class companies. We want to build pride in Myanmar for the way it is gaining respect internationally. How will other nations’ energy needs affect Myanmar? Myanmar is surrounded by energyhungry economies and regional blocs. With Shwe’s South East Asia Oil & Gas pipelines (SEAOP/SEAGP) to China and the Zawtika project, Myanmar becomes the largest exporter of gas in Southeast Asia, followed by Indonesia. The question is how the country can balance income from exports with energy independence for current and future generations. direct investment (FDI). We should focus on improving efficiency in generation and transmission while at the same time pushing for onshore exploration and development. I also believe privatepublic partnership arrangements will lead to less costly and more effective solutions. We also think the electricity law should be approved as soon as possible in order to address the issues properly. In the longer run, Myanmar can potentially become an electricityexporting country from hydropower and gas-ﬁred power generation. What issues need to be addressed urgently? It is important to execute the energy sector reform process in an inclusive, fair and transparent suspend it, given Myanmar’s great relationship with superpower China. But in this case a very large number of Myanmar people were badly affected, because social and poverty analysis was not done properly. So we need to come up with an agreement that is less one-sided. Now it falls to the environmentalists, professional bodies, multilaterals, various stakeholders and local society to argue the case against the project. I personally think that if the environmental and social costs far exceed the economic beneﬁts, any projects should be put under suspension. Can you describe your company’s corporate social responsibility (CSR) work and tell us why you do what you do?
Approximate investment in Myanmar in 2013 on energy exploration alone, not counting development
Rays of hope
Indigo Energy is a recent startup bent on bringing low-cost electricity to homes in the delta, one solar panel at a time
HEIN HTET AuNg email@example.com NERGY in Myanmar is often talked about in terms of billions of dollars, but some of the most exciting projects are happening on a smaller scale, where lives are changed in person one by one. While the government works to expand the national grid – a massive undertaking, particularly in remote areas – some smaller companies are instead focusing on what they call “microgrids”. By hooking up their houses or villages to sustainable sources of energy generated right in their own backyards, people can enjoy the beneﬁts of electricity immediately, without having to wait for the infrastructure of the national grid to reach them. Of course, these microgrids need to be self-sustaining. That’s where eco-friendly solutions from organisations like Indigo Energy come into play. Indigo Energy is a sustainable energy company started in September 2012 by young entrepreneur, engineer and managing director, Allen Himes. It’s a small organisation – just ﬁve foreign and local employees, plus an intern – but together the team members are using their skills to bring electricity to residents in the Ayeyarwady delta. Thanks to their projects, those who would otherwise rely on batteries or ﬁrewood are able to use solar power instead, freeing up their time, money and effort for other priorities. Originally from rural Mississippi, Himes – a trained electrical engineer – was living in Hong Kong when he decided to move to Myanmar. “Everyone said it’s exciting and new,” he said, remembering his decision to come. “I was reading about Myanmar in the newspaper, and I was like, ‘I’ll go check it out and see what’s happening.’” Assessing the country's energy shortfall, Himes originally intended to set up multi-megawattproducing wind power projects to generate electricity. In a country where hydropower and solid fuel generate most of the electricity, and where international money is pouring into lucrative oil and natural gas projects, sustainable resources like wind power are somewhat overlooked, and require relatively unfamiliar technologies for locals. But while the skill set was there, he said, securing the funding proved impossible, especially for such a small start-up company. “Wind power for a solo entrepreneur is much more expensive than what we are doing right now. When I came here, I didn't really understand that.” He says no matter how good your ideas or intentions are, it’s the ﬁnancial factor that sometimes determines your way forward. "I think I found my way to starting my business when I was reading a book about John D Rockefeller,” Himes said, explaining how the famous American oil baron of the late 1800s always bought stock in his own companies, even when others wouldn’t. “That's the way I look at it. I think if I'm really conﬁdent, I should put in my own money.” But it was convincing others that proved to be the problem. “When you go visit the government, and you say, ‘Hey, I want to do a big project,’ the ﬁrst thing they ask you is, ‘How much money do you have and where does it come from?’ Being an entrepreneur, the point is that you can't really develop a project for nothing if you didn't bring any investors.” Himes hasn’t ruled out wind power entirely – “if I had the right partner then I would deﬁnitely be open to it” – but in the short term he's concentrating on a more affordable option: solar panels. Solar seems a natural ﬁt for Myanmar. It brings power access to those not on the grid and homes
can be hooked up quickly. Indigo has so far installed two solar projects, both in villages in the Ayeyarwady delta. The lowcost agreements allow residents to light their homes and charge their phones cheaply, saving them time and effort as well as money that would otherwise be spent on batteries or solid fuel sources – a model Indigo hopes to spread. “We want to work in the Ayeyarwaddy because we have pretty good relationships so far. We are also interested in Yangon Region, because it's pretty close, and probably upper Myanmar and going to the dry zone area.” Is Indigo committing solely to solar? “Not at the moment, but I would like to develop hydroelectric energy," Himes said, "because hydro has a couple of issues. One is that in the summer the water goes off, especially in the dry zones. Also we need enough water in the ﬁrst place, and many many places don't have water. This is the problem we are having and we need elevation to do that.” Listing rocky Chin State as a possibile site for future work, he said the future for sustainable energy remains an uphill struggle. “It is deﬁnitely possible to develop sustainable energy in Myanmar, but it's deﬁnitely not going to be easy. “What we ﬁnd with the government is that they are quite enthusiastic about the world of electriﬁcation, but they don't really know how to help.” Data sometimes takes six months to obtain, and that slows progress. There are also technical problems to solve. The team recently made a trip back to the delta to ﬁx one of its projects, which was only producing two-tothree hours’ worth of electricity, instead of the expected ﬁve. Still, villagers are enjoying the new energy source, Himes said. And with Indigo looking to expand to other areas, the future seems bright for all concerned.
No money to burn
Unable to afford electricity, many rely on solid fuels such as charcoal instead
N the early morning I have to cook for my family, before they go off to work and to school,” says Daw Shirley, 69. “But if the electricity goes out, how can I do that? In the dark, I have to ﬁnd the candles and can’t ﬁnish the cooking in time.” Electricity in Yangon costs too much, Daw Shirley says – and that’s if it’s consistent. Usually, especially in the summer, it isn’t. If the power goes out when she – or anyone else in a country where less than 1 percent of the population receives consistent, reliable electricity – is cooking, the halfboiled rice will be ruined. That’s why she chooses something else. “Cooking with charcoal is better suited for me,” Daw Shirley says. Charcoal – wood heated without oxygen so it’s doesn’t burn down – costs around K5000 in Yangon for a 10-viss bag (16 kilograms, or 36 pounds). That’s enough to last ROSIE Daw Shirley and her family for more than a month, and costs less than the K9000 or K10,000 she estimates she’d need for electricity each month. After cooking, she can also take the leftover hot coals, load them into her charcoal iron and press the family’s clothes for the day. But not everyone can afford to buy in bulk. Many buy 1-viss bags instead. Even then, the price depends on what grade of charcoal they are buying. To make up the smaller portions, charcoal sellers break down a 10-viss bag, picking out the best pieces for one price range, the second-best for another, and then ﬁnally pouring out the tiny leftover bits to be sold to those who cannot afford larger pieces. “Even though I use charcoal I can’t buy the high-quality one,” says Daw Thandar Moe, 33. “So I buy the cheapest one, the lowest standard of charcoal. It’s nearly dust.” Still, she says, it’s only K200 or K250 per viss. Some who buy these cheaper bags pour off the water from their rice during cooking, mixing it with the dust to mould it into small bricks. Once it dries, it holds together almost like a new piece. “Cooking with the charcoal is less smoky, and it’s a lower cost for me,” says Daw Aye Aye Myint, 47. “I have to cook for my children to have the food ready in time for them to go to school. Cooking with the charcoal is very useful and quick for me to cook.” For some, neither option works. “To be safe from a ﬂow of electric current, you have to buy a good quality stove,” said Daw Myint Myint, 55. “Electricity is too much for me.” Nor can she afford charcoal except on rare occasions, because her grown son has learning disabilities and neither of them can go out to work. Instead, each summer she harvests dried branches from trees that have sprouted on her compound since the previous year. “I am cooking with wood,” Daw Myint Myint says.
Charcoal sellers in Yangon sort different grades for different prices. Photo: Staff
Gas turbines rise to fight power battle
The government is banking on natural gas-fired power plants to meet the nation’s immediate needs. Are they up to the challenge?
AuNg ShIN as you enter the compound itself the noise of the turbines becomes nonstop. “The gas turbines are 15 years old,” said station superintendent U Khin Maung Myint. “We have three gas turbines and one steel turbine in Ahlone.” The gas turbines are made in France by Alston, and have an installed capacity of 30MW apiece. They are fueled by Myanmar’s offshore wells, which feed their voracious appetites with a daily combined supply of 45 million cubic feet (mmcfd) of natural gas, which is divided among the three. U Khin Maung Myint said the facility gets only offshore gas, though he added that onshore gas is actually preferable for generating electricity, for complicated reasons to do with thermal energy. But with most of Myanmar's supply offshore, the country works with what it can get. After the gas turbines have done their work, they emit exhaust which drives the steel turbine. (All the turbines are made of steel, but this is how this secondary turbine is referred to by workers.) Gas turbine facilities generally have at least one steel turbine for every two-to-four gas turbines: the exhaust is considered "free", since it's already served its primary purpose, and by harnessing it, Ahlone generates an additional
AST November the Ministry of Electric Power announced the country would need 2370 megawatts (MW) during the 2014 hot season of March, April and May. "Currently," the ministry said, it produces "only 1655MW in maximum production." With only 26 percent of the country electriﬁed; with demand growing by 15 percent each year; and with nationwide consumption estimated to reach 10,000MW in 2020, there's just one question: Where is this electricity going to come from? Currently, Myanmar relies on hydropower plants for 75pc of its electricity. But hydro projects are major undertakings and cannot be completed in only a few short years. Until further hydroelectric dams are ready, the answer has to come from elsewhere. In the short term, two possible sources emerge: natural gas-ﬁred power plants and coal-ﬁred power plants. And since burning coal is an environmentally destructive act, widely condemned by environmentalists and the public at large, one one option is left: taking Myanmar's vast reserves of natural gas and turning them into the electricity needed to power the country into a new age. Gas-ﬁred power plants currently produce something less than one-quarter of total production. But the government’s 10 existing gas-ﬁred power plants are ageing. While they're under survey for renovatations, and some are either ready or have had deals signed recently for repairs that will increase their output, it's clear that these 10 facilities can't go it alone – nor can the government afford to simply build more. At least, not on its own. On March 6 The Myanmar Times visited one of the operational gasﬁred power plants in the Yangon area. There are four governmentowned gas-ﬁred facilities nearby: Hlawga, Ywama (Insein), Thaketa and Ahlone. The latter is situated on the riverbank in Ahlone township, next to Strand Road and close to the city’s downtown. The compound is quite big: Attached to it is a power transmission station, which sends the electricity generated at the plant out to homes and business. As you approach it you can see smokestacks rising from a distance, as if drilling into the sky;
Photo: Boothee Workers and technicians build parts of a new Toyo-Thai gas turbine power plant in Yangon's Ahlone township last week.
24MW maximum. Still, the aging turbines need proper maintenance to live up to their potential. At the end of last year, minor adjustments were made to the three gas turbines, bringing them up to about 110MW combined. But U Khin Maung Myint said the facility has put in a request for permission to have more maintenance carried out. The turbines, he says, are “running all the time”, and to keep it operating day and night requires nearly 100 employees working in shifts. Lately, though, the noise of the turbines has been blending with a different noise from the same compound: construction. Next to the government-owned turbines, a new gas-ﬁred power plant facility is partly complete at Ahlone. It’s being built by ToyoThai, a joint venture between Italian-Thai Development and Toyo Engineering from Japan. Toyo-Thai has been granted a 30-year concession to the land, U Khin Maung Myint said, as part of a BOT (Build, Operate and Transfer agreement with the MOEP, U Khin
Maung Myint said. While the exact details of the power purchasing deal are unclear, the new privately run turbines at Ahlone are being fuelled just like their government-owned neighbours: by natural gas piped in from offshore. The capacity of Toyo-Thai's two turbines – they're American-made, a product of General Electric (GE) – combines to nearly three times that of their three ageing neighbours. “The two turbines generate 84MW of electricity,” said a Thai official from the site, adding that another steel turbine with a capacity of 24MW is still under construction. As with all steel turbines, that 24MW will be a bonus: The main prize, the two core turbines, are already in operation. In addition to the Toyo-Thai plant, four more private gas-ﬁred plants are set to go up in the Yangon area soon. With a combined US270 million invested by one local and three foreign companies, each has installed capacities of
The government-run gas turbine power plant in Ahlone township has been running for 15 years. Photo: Boothee
300MW. The turbines are currently ready to generate 240MW, but production is waiting on a power purchasing agreement to be worked out with the MOEP. While Ahlone’s existing gasﬁred power plant belongs to the Myanmar Electric Power Enterprise (MEPE) under the Ministry of Electric Power, the nation's energy needs cross multiple government jurisdictions. “We have to negotiate with the MOGE [Myanmar Oil and Gas Enterprise] for the gas supply. We handle the turbine loading in accordance with the gas supply from the MOGE,” said one engineer. And while Ahlone's turbines are working 24/7 to meet the city’s aggressive electricity demands, even then, the engineer said over the din, there are periods of slowdown. “The electricity production of the turbines depends on the volume of the natural gas supply. Sometimes the volume goes lower due to some problems in the pipeline or at the offshore site. Then the turbines cannot ﬁre continuously. Production is stable when the natural gas comes in at a stable volume.” In 2013, demand for natural gas for domestic use measured 700mmcfd. But less than half of that – 300mmcfd – could be supplied. And this year the MOE estimates domestic demand will rise to 425mmcfd. So while new gas turbines facilities have sprung up quickly under government guidance, and while the private facilities offer dramatic improvements in production, whether or not they will be able to bridge the nation’s energy gap until hydroelectric is ready to take over in the long term will come down to a classic case of economics. While more turbines will expand the potential for cheap, stable electricity, they will be dependent on efficient extraction of natural reserves. An actual boost to the national grid – and a resulting decrease on electricity prices, for public, commercial and industrial use – will therefore depend on factors further up the pipeline. Will the supply be there? One thing’s for certain: There is no shortage of demand.
Focus on: Minhla oil fields
A photo essay by Aung Htay Hlaing
HESE photos were taken at Htankhine and Da Hut Pin oil ﬁelds in Minhla township, Magwe Region. Private prospectors drill 15 to 300 metres (50 to 1000 feet) below the surface and use a valve system to extract whatever oil they can ﬁnd, selling it in 50-gallon (227-litre) drums for K118,000-K180,000 each. Oil wells have operated in the area for more than 100 years, and private contractors continue to ply their trade using old-fashioned methods in spite of giant multinational interests moving into Myanmar’s energy market. About 100,000 people have moved to Htakhine since it became operational in 2006, while 400,000 have been drawn to Da Htut Pin since it started operations early last year. In both cases, most of the new arrivals are from Mandalay, Magwe and Ayeyarwady regions. They rent land from farm owners who lease up to 100 plots per acre for K500,000-K1.2 million (US$500-$1200) each. Some drillers are losing money, but others say they are doing well. Satellite businesses have also bubbled up alongside the oil, with meat, fruit and vegetable markets, and even KTV and massage parlours, turning brisk proﬁts in these shanty communities.
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