7~8 March 2017,

Tokyo, Japan

MR. MAUNGMAUNGTHAW

DEPUTY DIRECTOR

MYANMA PETROCHEMICAL ENTERPRISE

MINISTRY OF ELECTRICITY AND ENERGY

Outlook of LPG Business in Myanmar

International LP Gas Seminar

2017

2

MOEE and MPE

LPG Production & Distribution from MPE

LPG Supply and Demand in Myanmar

Domestic sale and safety

Price Trends of LPG in MPE and Market

LPG related to Joint Venture Projects

LPG Regulations

Future Prospects

Conclusions

CONTENTS

Electric Power Energy

Plants under MPENo. (2) Fertilizer Factory & LPG Plant (Kyunchaung)

No. (1) Fertilizer Factory (Sa-Le)

No. (2) Refinery (Chauk)

LPG Extraction Plant (Minbu)

Petrochemical Complex (Thanbayakan)

No. (3) Fertilizer Factory (Kyawzwa)

Methanol Plant (Seiktha)

LPG Extraction Plant (Nyaung Don)

No. (4) Fertilizer Factory (Myaungdaga)

No. (1) Refinery (Thanlyin)

No. (5) Fertilizer Factory (Kangyidauk)

5

Decreasing LPG composition in NG

Minbu – 8.6% to 1.7%

Naung Don – 4.6% to 1.3%

Kyun Chaung – 4.6% to 0.5%

Liquefied Petroleum Gas Plants in MPE

PlantNG (mmscfd)

(Current)

LPG

(MT)Copmany

Year of

Built

LPG Plant

(Minbu) 24

(8)

99

(10)

Mitsubishi

Heavy

Industry, Japan

1986

LPG Plant

(Nyaung Don) 10-16

(16)

30

(17)

CMC Dong

Fang

International

Co.,ltd

2005

LPG Plant

(Kyun Chaung) 8-10

(0)

15

(0)

CMC Dong

Fang

International

Co.,ltd

2010

6

Other sources for LPG production

LPG Production & Distribution from MPE

COKER PLANT , NO.1 REFINERY, THANLYIN

• ALREADY SHUT DOWN

COKER PLANT, PETROCHEMICAL COMPLEX , THANBAYARKAN

• DESIGN CAPACITY – 15 MT/day

• CURRENT CAPACITY – 11 MT/day

LPG Production & Distribution from MPE

7

0

2000

4000

6000

8000

10000

12000

14000

met

ric

ton

Prd

Dis

Import

MPE supply about 10,000 MT /yr

for Myanmar’s Demand

LPG Supply and Demand in Myanmar

8

Importation of LPG by private companies

No. YearImported LPG

(MT)

1 2011-2012 4855.920

2 2012-2013 5411.164

3 2013-2014 8465.200

4 2014-2015 2663.120

License holding companies imported LPG with sea trade by using MPE’s Facilities.

From 2014 August to now, MPE didn’t share storage and facilities to private

companies and their importation only rely on border trade.

YearImported LPG

(MT)

1 2014-2015 16244.718

2 2015-2016 14409.066

3 2016-2017

Import by sea trade

Import by border trade

9

Overall LPG Demand and Supply Balance

Market Size

50000~60000MT/yr

Current LPG Demand and Supply Balance

Government SectorPrivate Sector

MBU

3000MT/yr

Naung Don

2500MT/yr

Domestic

Production

Import by

Government

Import by

Private

Border trade(China,

Thai)

45000MT/yr

Vessel

Cannot run

because of no

facilities

Vessel

1800MT/yr

Supply & Demand Balance

10

Current LPG production from state own plants – 800 MT/month

All production are distributed ( 19% of demand)

LPG demand in one year – 50,000~60,000 MT

Required amount for demand is fulfilled by licensed companies

LPG Supply and Demand in Myanmar

0

5000

10000

15000

20000

25000

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

Distribution/M

T

MPE

Private

11

Domestic Sale and Safety

Start the LPG distribution by government sectors

since 1986

Distribute from state owned plants and stations

Give permit to private companies to distribute LPG

in 2010

Start giving licenses to promote privatization in 2012

12

Domestic Sale and Safety

All LPG business can be done with

respective licenses

Formulate discipline for all license

Discipline base on API and NFPA standard

Give safety awareness to retailers and end

users

Give LPG handling training to MPE

persons as well as companies’ workers

Distribution from MPE

• Government officers from

respective ministries

• Monastery

• University

• Hotel

• Hospital

• Ceremony held by government

13

Price Trends of LPG in MPE and Market

Objectives

Firewood

Illegal LPG

Promote legal and safe use of LPG

Safe Health

Safe home

Safe environment

14

Sale with subsidized price from 1987 to 2011

Increase the price higher than the production

cost from 2011 to the present

0

200

400

600

800

1000

1200

Kyats/kg

MPE propane

MPE Butane

Private

Price Trends of LPG in MPE and Market

1

5

Myanmar Investment Commission (MIC) Notification

26/2016

In Accordance with Myanmar Investment

Commission Notification 26/2016, import, export,

transportation, storage, distribution of oil, gas &

petroleum products and storage tanks, jetty, pipe

lines, accessories and buildings are permitted only

under the condition of the Joint Venture with

Ministry of Electricity and Energy.

1

6

Joint Venture Projects under MIC’s Notification

MOEE is liable to have the right as follows:

Golden Share

One board of director with Veto Power.

MOEE is the owner of the golden share and shall have Veto

Power in any major matters concerning Political, Social,

Environmental, Energy Policy, Safety, Security and Community

issues.

ASIA AVA Gas Company Ltd

(JV with MPE)

Business

- LPG Importation, Storage and distribution

Incoming project

Existing LPG Terminal in Thanlyin Refinery Area

LPG Plant (Nyaung Don) and 3 filling stations in

Yangon

Business

- LPG Production and distribution1

7

Joint Venture Projects under MIC’s Notification

18

Ongoing process for drafting the LPG regulation

The regulation covers all LPG business such as

production, storage, importing, distribution

The regulation specifies:

The frame work which requires the business

operators

The procedures to operate safely

The standards for LPG facilities

LPG Regulations

19

Regulatory Scope

Overarching the LPG production, storage and

distribution

All LPG business operators

All LPG facilities and equipment producers

Testing and inspection groups for LPG business

LPG Regulations

20

Future Prospects

LPG will become country’s leading alternative fuel in

accordance with national energy policy and target

Government has encouraged to promote the private sector

All Laws and Regulations concerning with LPG Business

will appear for safety and security

LPG Business in all levels will be appeared rapidly

21

Conclusions

LPG Business becomes brighter

Creating Awareness for using LPG is important

Safety standard of LPG facilities Installation and

Equipment

Safe working and operation of LPG facilities and

equipment installation

Competency of LPG handling operators

Training like this is absolutely promote technical

knowhow for LPG business