Myanmar junta partners with Chinese firm to build natural gas terminal despite Rakhine State conflict

Myanmar's military regime is collaborating with a major Chinese pipeline company to build a Liquefied Natural Gas (LNG) terminal, aiming to boost power generation across the country, according to discussions held on Monday. The junta’s Ministry of Energy announced that they plan to increase domestic power generation by sharing natural gas between the two countries, but they have yet to officially release details about where the project will be implemented. According to a source close to the junta’s Ministry of Energy, the military is planning to implement the project in the Mahar natural gas block, located in Rakhine State’s offshore oil and gas field."That LNG terminal is more likely to be built in Kyaukphyu,” the source told Myanmar Now. “But Chinese interest is low due to both high investment costs and fighting in Rakhine.” The Mahar natural gas basin lies 30km from the Shwe natural gas project, which supplies natural gas to China. It is also close to Rakhine State's Kyaukphyu Township, the site of the China-Myanmar oil and natural gas pipeline project, where clashes have broken out between the Arakan Army (AA) and the junta since February. Posco International, a South Korean company leading operations at the block, announced in early 2020 that the field was discovered with a capacity to produce 38 million cubic feet of natural gas per day, and that they would continue conducting feasibility studies for commercial production. The Ministry of Energy affiliated source added that the project, including the technology to convert natural gas into LNG, will demand an investment of at least $2 billion. Additionally, the junta aims to utilise the Mahar block for domestic power generation, as its gas reserves are not commercially viable compared to other offshore gas fields in Myanmar. In November, during junta Energy Minister Ko Ko Lwin’s visit to Beijing, he discussed this project with the chair of the China National Petroleum Corporation. V Power, a Hong Kong company running an LNG-to-power project near Yangon, suspended operations and withdrew its LNG vessel in 2022 due to challenges operating under junta rule. The company had initially been involved in Myanmar's power generation projects for several years, but eventually suspended its projects after the 2021 coup, citing foreign currency shortages and increasing difficulties for foreign companies to operate in Myanmar.Currently, locals say that even major cities like Yangon and Mandalay receive only about four hours of electricity per day, with limitations even imposed on major factories.

Myanmar junta partners with Chinese firm to build natural gas terminal despite Rakhine State conflict

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