Shell and Thai Firms to Develop LNG Terminal in Myanmar's Dawei SEZ

Royal Dutch Shell plc recently entered into an agreement with Thailand-based companies to develop a liquefied natural gas (LNG) terminal at the Dawei special economic zone in the Tanintharyi Region in Myanmar, local daily Myanmar Times reported Monday.

The European major signed a Joint Development Agreement (JDA) with Italian-Thai Development Public Company Limited and LNG Plus International Company Limited in Bangkok, Thailand Aug. 19 to cooperate in the development of the LNG receiving and re-gasification terminal at Dawei, where LNG will be offloaded for on-shipping to various businesses in Dawei, Thailand and to the rest of Myanmar.

“We believe that this opportunity will enable Shell, together with its partners, to bring its global expertise in LNG to Myanmar meeting the country’s energy aspirations,” Roger Bounds, Shell's vice president of Global LNG said, as quoted by Myanmar Times.

He added that initial customers would be developers from inside the Dawei special economic zone and the terminal will later serve as a conduit to Thailand and other parts of Myanmar.

Shell will provide technical exertise to develop the LNG terminal at Dawei as well as "access terminal capacity and supply LNG to customers" under the JDA, but did not provide further details.

According to Myanmar Times, the JDA is the first major LNG business transaction in Myanmar. Foreign companies from the region, including China, South Korea, Japan, India, Singapore and Thailand, have also held discussions with the Myanmar government to develop the LNG facilities.

While Myanmar is a major producer of natural gas in Southeast Asia, most of the country's supplies are exported, mainly to neighboring China and Thailand, on long term contracts. However with the government planning to step up development of infrastructural projects such as those for electricity generation to expand the local economy, which would lead to higher energy -- including natural gas -- consumption, Myanmar is expected to import the fuel in the medium term.

Myanmar produced 593.22 billion cubic feet (16.8 billion cubic meters) of natural gas in 2014, an increase of 28.6 percent over the previous year, data from BP Statistical Review of World Energy 2015 indicated.

“The LNG market is growing. It is very strong even though the price is low at present due to continuous falling of international crude oil price,” Bounds said, as reported in Myanmar Times.

Shell has expanded its presence in Myanmar in recent years. The company and its partner Japan’s Mitsui Oil Exploration Co. Ltd. inked three production sharing contracts (PSCs) in February for Blocks AD-9 and AD-11 in the Rakhine Basin and Block MD-5 in the Thanintharyi Basin. These blocks were awarded by Myanmar in March 2014 under the country's Offshore Bidding Round - 2013.


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