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Myanmar Open to Coal-Fired Power for Internal Use, PTT Says

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March 1 (Bloomberg) -- Myanmar is open to using coal-fired power for a planned $8.6 billion industrial zone in Dawei as long as the electricity is used for domestic needs only, said Pailin Chuchottaworn, chief executive officer of PTT Pcl.

PTT, Thailand’s biggest energy company, had planned to invest in a coal plant in Dawei that would export power to Thailand before Myanmar’s government scrapped the 4,000-megawatt project earlier this year, Pailin said. The plant was in original plans by Italian-Thai Development Pcl for a deep-sea port and business park in the Indian Ocean town.

Myanmar’s government is “against the idea of exporting coal-based power to Thailand but they will allow coal-based power for internal use,” Pailin said in an interview yesterday. PTT, whose exploration arm is developing nine blocks in Myanmar, stands ready to help develop the nation’s oil and gas industry, he said.

Myanmar’s year-old government has scrapped two large-scale power-plant projects since taking office as it undertakes democratic reforms and improves relations with the West. Last September, it suspended a China-backed $3.6 billion hydropower station designed to ship electricity across the border because of environmental concerns.

More than 100 dissident organizations today called on President Thein Sein to halt construction of oil and gas pipelines across Myanmar by China National Petroleum Corp. The open letter cited the cancellations of the two power plants and called for a “consistent policy of social and environmental accountability, and an immediate postponement of the project.”

Dawei ‘Questionable’

Myanmar supplies about a quarter of Thailand’s daily gas consumption from offshore production in the Gulf of Martaban, Pailin said. Thailand has been Myanmar’s biggest export market the past five years, according to data from Myanmar’s Central Statistical Organization.

While Dawei would be a good location for a deepsea port, Pailin was unsure if Thai companies would use it as an industrial hub.

“Whether it’s a good site for industry for Thailand, that is still questionable,” Pailin said. “The distance between Bangkok and the area is a couple hundred kilometers, and you can cross one whole mountain range. You compare that with going down to the south and getting out to the sea is so much easier.”

Petrochemicals, Refineries

PTT Exploration & Production Pcl expects to sign contracts to explore for oil and gas in Myanmar’s Block G and Block EP2 concession areas, Chief Executive Officer Anon Sirisaengtaksin told reporters on Feb. 15. The company is also exploring the wholly owned M3 block and aims to develop gas-related industries, he said.

“It’s obvious that the Myanmar government wants to use the oil and gas, whatever is coming out of M3, for their own use,” Pailin said. “PTT is ready to help develop that field and back integrate it into related industries as power and petrochemical and refineries.”

PTT signed an agreement in 1995 to purchase gas for 30 years from the Yadana field, which is operated by Paris-based Total SA and includes Chevron Corp. as an investor. It also imports gas from the Yetagun field in which it shares an interest with Myanma Oil and Gas Enterprise, Nippon Oil Ltd. and Petroliam Nasional Bhd., known as Petronas, Malaysia’s state-run oil company.

“In the past 10 years we are the only company that provides hard currency to Myanmar,” Pailin said. “Today we can say we enjoy very good support from the Myanmar government. That will be one of the main prime areas for expansion for PTT and for Thailand.”

To contact the reporter on this story: Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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