Oil Industry in Myanmar
～ Challenges to overcome ～
Feb, 2015
Nomura Research Institute
Contents
①Present situation of Myanmar Oil Industry
②Myanmar Oil Industry in the future
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
1
Myanmar energy supply structure
Myanmar will have to depend more on the oil products in the future
 It is clear that oil products demand will grow due to increase in number of vehicles
Energy supply structure(2010)
Energy supply structure(2030)
Total: 14.0 MTOE
Coal and
Peat
2% 6%
6% 2%
Crude Oil
12%
3%
77%
Total: 35.2 MTOE
Natural
Gas
Renewabl
es
Biofuels
and Waste 1.
2.
3.
4.
38%
Key Factors
Government Policy
Energy Conversion
Foreign Investment
Energy/Environment Conservation
28%
27%
Coal and
Peat
Crude Oil
Natural
Gas
Renewabl
es
Biofuels
and Waste
Source : IEA
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
2
Impact of rising energy consumption on economy
Rapid increase in energy consumption can also become potential
bottleneck towards economic growth of the country
Population
Increase
Expectation of
Economic Growth
FDI Increase
Economic
Growth
Limit the FDI
increase
Limit the economic growth
Unstable
Financial Market
Outflow of
the added value
Decrease of
Foreign currency
Reserve
Energy
consumption
Increase
Increase of
Oil products
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
3
Problems in Myanmar Oil Industry
There are mainly 4 problems in Myanmar Oil Industry
Problems exist in each value chain of oil industry
Problems
Action by GOM
Import
③ Inefficiency of the
distribution system
Storage
Transport
Wholesale
Retail
a. Several small players
b. Smuggling/ illegal trade
c. Poor quality products
④ Safe / Reliable Operation
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
①
Deficiency of government
control / management
Refinery
② Low competitiveness of
domestic products
?
?
?
?
4
② Low competitiveness of domestic products – refinery location in Myanmar
Myanmar has 3 refineries.
However, the operation rate is considerably low.
Location / capacity of refinery
Existing Refineries
Chauk
• 6000 BPD
Domestic production result / Operation rate
Refinery (Plan)
New Refinery
• 56,000 BPD plan
• With Thailand and
China company
Ron70
Diesel
ATF
Total
2010-2011
131.92
118.31
11.51
261.74
2011-2012
119.21
91.53
13.49
224.23
2012-2013
98.18
88.93
13.39
200.5
Operation rate
(2012-2013)
-
-
-
41.7%
Myanmar
Thanlyin
• 20,000 BPD
Mann
Thanbaykan
• 25000 BPD
Dawei
• 100,000BPD
• With Guangdong Zhenrong
Energy Co.Ltd.
Source：Opportunities For Co-operation In Petroleum Products
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
5
② Low competitiveness of domestic products – present situation of Thanlyin Refinery
Specially, Myanmar’s No.1 refinery (Thanlyin) has structural problems
The present situation of Thanlyin Refinery
 Facility
 Limited production compared to its actual
capacity
 Limitation of jetty / ship-to-ship
(offshore) transfer capacity
 Lack of desulfurization system
 Deterioration of Coker unit / bitumen units
 Limitation of tanks
 Operation status
 Limited production of domestic condensate
 Insufficient LPG recovery
 Evaporation loss
Source：Opportunities For Co-operation In Petroleum Products
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
6
③ Inefficiency of the distribution system – several small players
After privatization, basically private companies can conduct business
freely except domestic product distribution
SOE
Private Company
Petroleum
products
Gasoline /
Petrol
(≒RON 70,
RON87)
Octane-92
(RON92)
Diesel
(including
Premium
Diesel)
Production
Thanlyin
refinery
(MPE)
Overseas
refineries
(e.g. Singapore)
Importation
MPE lease the
storage to MPPE
* Will change after
MPE JV project
MPTA members
Private company
should join MPTA
to procure oil
products from
abroad
Overseas
refineries
(e.g. Singapore)
JET
Overseas
refineries
(e.g. Singapore)
CNG
Yetagon /
Yadana
Storage
MPE（MPPE）
※Storage
within Thanlyin
Wholesale / Retail
MPPE gas
stations
MPPE
Private gas
stations
Wholesale amount
is controlled
by MPPE
Buyer transfers on their
own rolls/ownership
MPE（MPTA）
(Storage within
Thanlyin)
Private
Gas
Stations
MPTA
members
Customer
State factories /
vehicles
Private vehicles
Private vehicles
MPTA rents storage from MPE
Private
industries
Private companies
MPE
MPE (MPPE) (Storage
within Thanlyin)
Private importers
(100+)
Private companies
(own storage)
MPE
MPE (MPPE) (Storage
within Thanlyin)
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
MPPE
State industries
Wholesale
Retail company
Private gas
stations
MPPE
State-owned gas
stations
Private industries
(generator),
vehicles,
Airport
CNG vehicles
7
③ Inefficiency of the distribution system – several small players
Big family-owned companies have smaller subsidiaries for oil product
distribution. Each company conducts business separately.
Name of the
Player
Parent Company
No. of Gas
Stations
No. of Storage Units
Sales Amount / month (in tons)
Ron 92
Ron 95
HSD
Premium
8,700
Nilar Yoma
KBZ Group of
Companies
31
• 2 tanks (300,000 gallons each),
• 2 barges for diesel , 1 barge for
Ron 92
23,000
30,000
Myawady
Trading
Myanmar Economic
Holdings Ltd
16
• 2 tanks, 1 tank under construction,
• 8 barges
11,000
20,000
Denko
Eden Group co., Ltd
34
• 10 tanks (Planned),
• 9 barges
5,500
ST Oil
Shwe Taung Group of
Companies
15
-
3,000
Max Energy
Max Myanmar Group of
Companies
26
• 5 tanks under construction (45,000
metric tons in total),
• 5 barges
5,000
500
5,000
1,000
Green Luck
Asia World Co. Ltd
20
• 10 tanks, 6 tanks under
construction,
• 5 barges
30,000
500
70,000
14,000
New Day
New Day Energy
Corporation
• 3 tanks planned (2 million each) ,
• 4 barges for Diesel
3,000
500
2800
2,000
Apex Gas & Oil
Apex Gas & Oil Public
Company Limited
21,000
-
3,000
Thuriya Energy
Dagon Group of
Companies
17 + 3
(planned)
17 + at least • 3 tanks, ( 2 1-million gallons tank,
3 to expand
1 3-million gallons tank) , 5 barges
3
-
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
2,500
5,500
29,000
7,700
7,800
1,600
8
③ Inefficiency of the distribution system – smuggling / illegal trade
As mobile Team has kept eyes on smuggling, illegal trading in Yangon and
Mandalay mostly disappeared.
However, illegal trade in border and sea areas still exist.
 Current Situation
•
By comparing the gap between actual consumption and
calculated consumption based on total registered cars in the
country, it is estimated that 60% must have been from the black
market, according to the mobile team director.
 Active Areas
•
Illegal imports are still active in border areas such as Rakhine
with Bangladesh and India, Mon state, Kayin State, Myeik
where ocean tank black market is prevalent and Tachileik (Shan
State) where China and Thailand illegal border trades are very
active due to weaknesses in border guarding.
 Reason behind the prevalence
•
The main selling point for illegal imports is the cheaper price
(400~700 kyats/gallons) than the market price since tax
avoidance allows a lower operation costs for illegal importers.
Arrows show where fuel
product supplies flow into
border areas
The main area where
smuggling products enter
central region of Myanmar
through sea way
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
Source）各種公開情報および現地調査結果よりNRI作
9
③ Inefficiency of the distribution system – smuggling / illegal trade
NRI estimates that around 20% of the oil products demand is supplied
by illegally imported products. GoM lost roughly 300 million USD.
Oil market demand / supply in Myanmar
（FY2013, NRI estimation）※ Only gasoline and diesel
（KB/D）
輸入量
Import
Production
Thanlyin生産量
(Thanlyin)
Production
Mann/Chauk生産量
差分
Demand NRI
(Mann / Chaulk)
10
8
1.7
6
0.4
0.8
8.8
4
5.9
2
0
Statistics
実績値
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
NRI
NRI推計
Estimation
Source）NRI forecast
10
③Inefficiency of the distribution system – poor quality product
MPE checks the quality of only imported products in Thanlyin.
But on the distribution process, nobody knows how these products are
treated until being sold.
 Specification MPE set for import product
RON 92 Gasoline
Characteristics
Specifications
Color (Visual)
Red
Density at 15C,kg/l
Report
Research Octane Number (Ron) min 92.0
Reid Vapor Pressure, psi
max 10.0
Sulphur, % wt
max 0.10
Lead Content, GIL
max 0.020
Copper Strip Corrosion
max 1
(3hrs@500)
Existant Gum, mg/100 ml
max 4
Introduction period, minutes
min 240
Nercaptarn Sulphur, ppm
max 15
Benzene Content, % vol
max 15
Bistillation, degree C
Initial Boiling Point
Report
10% vol Evaporated
max 74
50% vol Evaporated
max 127
90% vol Evaporated
max 190
Final Boiling Point
Max 225
Residue, % vol
max 2.0
Diesel
Characteristics
Specifications
Colour
2.0 max
Density al 15deg, C, Kg/l
0.82-0.87
Distillation deg, C.90% Recovery 370 max
Cetane Index
48 min
Flash Point Deg, C
66 min
Sulphur, Mass %
0.5 max
Copper
No.1 max
Corrosion(3hrs@50deg,C)
Ash,mass%
0.001 max
Viscosity at 40deg, C, cst
1.7-5.5
Pour Pant,deg, C
9 max
Conradson Carbon Resdue,
0.1 max
mass%
Water & Sediment, Vol %
0.05max
Sedimnet by extraction. % mass 0.01 max
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
Source: MPE Thanlyin refinery
11
③Inefficiency of the distribution system – poor quality product
Unsafe and illegal operation are spreading all over the conutry.
Unsafe discharging operation
Illegal retail shops
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
Source: MPE Thanlyin refinery
12
④ Deficiency of government control / management
Keeping the illegal trade aside, MOE should try to figure out the present
situation of oil industry.
Distribution amount of Gasoline
(KL）
200
180
160
120
100
129
124
110
109
112
113
113
113
98
93
103
140
?
? ?
Before privatization, MPPE
distributed all the oil products across
Myanmar, so MPPE understood the
distribution amount correctly.
After 2011, MPPE hasn’t collected
the information from each distributor.
80
60
As nobody has grasped the correct
present demand of oil products, it is
difficult to forecast the future.
40
20
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
0
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
Source：MPPE 13
④ Deficiency of government control / management – Demarcation between each SOE
MPE and MPPE have opened the bid of JV project with foreign co.
MOE should take care not to make them compete wastefully
JV project by SOE in Myanmar
For gasoline
Already bided
For diesel
JET
Plan to bid
その他
Thanlyin Refinery JV Project
Refinery
Import
Storage
Transport
JV Project for
Gasoline
distribution
（MPPE）
JV Project for
Diesel
distribution
（MPPE）
JV Project
for jet fuel
distribution
（MPPE）
Bitumen
Import/
Wholes
ale
（MOT）
Wholesale
Retail
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
Unclear demarcation
Between MPE and MPPE
14
(Reference)
To get good choices, MPPE should not make the participants
qualification too severe.
 Contents of MPPE new tender for gasoline / diesel distribution
 Schedule
▪ ITT flow : Next May
▪ Proposal preparation : 2 – 3 month
 Qualification
▪ The company should have experience import, wholesale and retail business at
least in 3 different countries.
 Other condition (Plan)
▪ MPPE have intention to split its asset into 2 portions and call tender for 2 JV
companies for sense of risk reduction
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
15
(Reference)
No foreign company is allowed to enter this market yet
Only JV with SOE is the way for them to participate
 According to Myanmar Investment Commission Notification No.1/2013 published on 31st January, the new Foreign
Investment Law now permits foreign capital in all downstream VC activities.
Stipulations of the new Foreign Investment Law (Unofficial translation)
Oil Refining
Petrol chemical plants
Petroleum chemical plants
Importation
Transportation,
store and marketing
 Foreign investment is possible in all downstream VC activities (certain restrictions apply)
FOREIGN
INVESTMENT
LAW:
Restrictions
3.3) Requiring environmental
impact assessments
Enacted on
2 Nov, 2012
Notes
Stipulations
announced on
31 Jan, 2013
• Depending upon the
business activity
• Allowed only after
conducting initial
study and assessment
upon environmental
and social impacts
• 1-15. Petrol chemical plants
including manufacturing of
petroleum, various kinds of
petrol, fertilizers, waxes, and
varnishes
3.1) Allowed with the relevant ministry‘s recommendations
✓
 To obtain the
approval of the Union
Government
✓
 To obtain and follow
the Ministry of
Energy’s terms and
conditions
 To obtain the approval of the Union Government
• 9-4. Construction and
operation of petroleum
chemical plants
• Oil refineries that produce
or use substances such as
MTBE and TEL that can
damage the environment
and health is prohibited
• 9-1. Importation and
marketing of petroleum and
petroleum based products
as raw materials
✓To obtain and follow the Ministry of Energy’s

terms and conditions
• 9-5. Transportation, store,
and marketing of oil,
natural gas and petroleum
products
Source) MIC Notification, Foreign Investment Rules 31/1/2013 (Unofficially translated by Myanmar Legal Service)
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
16
Contents
①Present situation of Myanmar Oil Industry
②Myanmar Oil Industry in the future
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
17
Oil products demand in the future
We estimate that the oil product demand will reach 200KB/D in around 2025,
and could be over 350KB/D in 2035.
Oil product demand by product in Myanmar
（KB/D）
400
（373.6）
350
300
（268.1）
168.5
158.4
250
148.8
139.9
131.5
（193.6）
200
123.6
116.2
109.2
（140.8）
150
（91.4）
100
44.4
50
0
102.7
（102.9）
46.5
49.4
52.5
55.7
59.2
62.9
66.9
71.1
96.6
75.6
80.3
79.1
84.6
96.8
69.2
74.0
90.5
146.6
127.5 136.7
118.9
103.6 111.0
2020
2021
2022
2023
2024
2025
2026
31.3
26.9
24.9
2011
43.5
49.9
53.3
56.8
60.7
36.3
46.8
64.8
2012
2013
2014
2015
2016
2017
2018
2019
ジェット燃料
JET
85.4
90.8
重油
Fuel Oil
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
2027
軽油
Diesel
2028
2029
2030
2031
157.3
2032
168.9
2033
181.4
2034
194.9
2035
ガソリン
Gasoline
Source）NRI analysis
18
Oil product demand by area
Most of oil product demand concentrate in Yangon area in 2013.
In next 20 years, the demand in the other will increase.
Oil Product demand by area
(Unit：KL/d)
2013年
FY2013
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
FY2035
19
Gasoline demand by area
Except Yangon area, demand of gasoline will increase in the area
around Mandalay
Gasoline demand by area
(Unit：KL/d)
2013年
FY2013
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
FY2035
20
Diesel demand by area
Diesel demand continue to increase mainly in Yangon area
Diesel demand by area
(Unit：KL/d)
FY2013
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
FY2035
21
Why refinery is needed ?
Currently, the price difference between crude oil and oil products are around
15-25%. This difference will be 2.8 billion USD/year in Myanmar by 2035.
Price trend of Crude oil and Oil products
Gasoline price/Crude oil price
Diesel price/Crude oil price
Cushing, OK WTI Spot Price FOB (Dollars per gallon)
New York Harbor Conventional Gasoline Regular Spot Price FOB (Dollars per Gallon)
New York Harbor Ultra-Low Sulfur No 2 Diesel Spot Price (Dollars per Gallon)
100.0%
90.0%
3.00
80.0%
Price
USD/Gallon
（
）
2.50
70.0%
2.00
60.0%
50.0%
39.0%
1.50
1.00
33.6%
25.1%
15.9%
24.9%
19.7%
25.4%
23.8%
15.2%
12.9%
0.50
31.2%
40.0%
29.1%
20.5%
16.1%
10.7%
30.0%
20.0%
10.0%
3.3%
-
0.0%
2006
2007
2008
2009
2010
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
2011
2012
Price difference
between crude oil and oil products
3.50
2013
Source）http://www.eia.gov/dnav/pet/pet_pri_spt_s1_d.htm
22
Conditions for building the 200kbd refinery
Generally, the capacity of oil refinery should be over 200 kb/d to
compete with international products. The conditions are like below.
Requirements for building a 200kb/d refinery
Condition
Item
Port facility
In the point of Single Point Mooring (SPM), the depth of water should
be more than 27m, as VLCC draws 23m of water
Land area
At least 400-450ha（4km2~4.5km2）
Ground strength
Ground improvement is necessary as needed
Electricity capacity
100-140MW * Necessary capacity vary depending on the
petrochemical unit
Water
60 - 70 thousands TP/D (60ML/D~70ML/D)
Number of staff
~2000
Construction period
10 years
•FS & DFS(2 years)
•Licenser selection/ Feed(1.5 year)
•Basic design (1 year), EPC tender(1 year)
•EPC contract ~ Operation(4~5 years)
Project cost
4 - 5 billion USD * Depending on the configuration and other conditions
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
23
Conditions for building the 200kbd refinery
（Reference） VLCC (Very Large Crude Oil Carrier)
 Size of VLCC
① Overall length : 333m
② Width : 60m
③ Height : 29m (Draft at high tide : 20m)
③29m
③20m
①333m
②60m
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
24
Conditions for building the 200kbd refinery
The potential of fossil fuels is restrictive.
Myanmar should import more crude oil from abroad.
 Through gas exportation, Myanmar has acquired foreign currencies, thus most of the
natural gas produced in Myanmar has been consumed abroad.
Energy resources potential in Myanmar
Resource
Hydro
Crude Oil
Natural Gas
Reserve
> 100 GW(Estimated)
Onshore
102 MMbbl (Proved reserve)
Offshore
43 MMbbl (Proved reserve)
Onshore
5.6 Tcf (Proved reserve)
Offshore
11 Tcf (Proved reserve)
Coal
540 million tons(Estimated)
Wind
365 TWh / year
Solar
52,000 TWh / year
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
100kbd
Refinery *
4years
Export
Source : MOE, JEPIC
25
Potential site for the next competitive refinery
There would be 4 potential site for the competitive refinery.
As each of them has Pros & Cons, MOE should conduct feasibility study and figure
out which one will be the best for this industry.
Area
A.
Kyaukphyu
Pros
Cons
• Deep sea port was
already set up by Chinese
Government
• Can avoid the damage
from monsoon
• There is no logistic route
toward two main demand
city (Yangon and
Mandalay)
B.Man
A. Kyaukphyu
B.
Man
• Close to Mandalay area
• Can distribute products
through existing logistics
routes
• Shoud hold the risk in
terms of energy security
because it has to depend
on the pipeline owned by
China.
C.
South area of
Mon state
• Close to Yangon area
which has largest oil
demand
• No suitable land found in
this moment
• Ethic conflict
D.
Dawei
• Suitable land is already
prepared
• No need to conduct
persuasion to
neighborhood
（単位：KL/d)
Thanlyin
C. South area of Mon
（Karego、Ye…etc）
D. Dawei
• Far from the main
demand areas
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
26
Conditions for building the 200kbd refinery
Suppose that Thanbyuzayat or Ye could be the best place for the new refinery.
Mawlamyine
Mawlamyine
Boundary line
(Depth of water > 30m)
Ye
Dawei
Potential place
Distance
from Yangon
Connection to the existing
railway
Thanbyuzayat
380km
20 km line expansion should be
constructed from Thanbyuzayat station
Ye
500km
10 km line expansion should be
constructed from Ye station
Dawei SEZ
683km
25 km line expansion should be
constructed from Dawei station
Thanbyuzayat
Ye
Source）http://mdnautical.com/i-bay-of-bengal/6906-british-admiraltynautical-chart-826-yangon-rangoon-river-to-heinze-islands.html
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
27
Condition for building the 200kbd refinery
（Reference） Potential site for 200kb/d refinery in Thanbyuzayat.
Expansion line
for transportation
2 km
Potential site for
200kb/d refinery
2 km
Existing railway
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
28
Condition for building the 200kbd refinery
Large scale distribution infrastructure is necessary for 200kb/d size
refinery.
Transportation capacity (Assumption : transport all products from refinery by single transportation type)
Product
Crude
BP/D
( Barrel per
day)
KKL
Sea transport
vessels
（20m * 6m * 2m）
Railway
Tanker (6000kl)
Lorries
Lorry
Trains
Pipeline
12KL/unit
200,000
33
109.1
5.5
596
29.8
2,728
-
LPG
12,000
2
6.5
0.3
36
1.8
164
-
Gasoline
83,200
14
45.4
2.3
248
12.4
1,135
-
Jet fuel
14,200
3
7.7
0.4
43
2.2
194
-
Diesel
61,000
10
33.3
1.7
182
9.1
832
-
Fuel oil
20,500
4
11.2
0.6
62
3.1
280
-
2,040
1
1.1
0.1
7
0.4
28
-
321
1
0.2
0.0
1
0.1
4
-
29.0
2,636
-
Propylene
Sulfur
Refinery Fuel
Total （Unit / day）
8,500
105.4
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
5.3 －
29
Condition for building the 200kbd refinery
To satisfy the large demand in 2035 (over 350kb/d), GOM should
build “ Modal Mix “ while considering other industries
Railway + Lorries
Water transportation +＋Lorries
Refinery ~ Yangon
⇒Distribute by vessels
●←Refinery /
/
Import terminal
Lorries
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30
Condition for building the 200kbd refinery
The transportation method and quantity of oil product in around 2035.
(Assumption : the total oil product demand is 400 kb/d)
Diesel
Unit : kb/d
Gasoline
For Sittwe(by 6000KL tanker)
For gasoline：0.02 tanker/d
For diesel：0.1 tanker/d
85
80
80
0.6
75
0.5
0.4
0.2
To Mandalay area (by trains)
For gasoline ： 11.9 trains / d (20 cars set)
For diesel ： 11.2 trains/d (20 cars set)
75
70
0.1
Mandalay
0
110
105
100
95
90
Rakhine
For Yangon area (by 6000KL tanker)
For gasoline：2.6 tankers/d
For diesel：2.9 tanker/d
10
6
97
Yangon
1
0.8 0.8
0.5
0.6
For Dawei area (by 6000KL tanker)
For gasoline：0.1 tanker /d
For diesel：0.1 tanker/d
0.4
0.
4
0.
5
To Mon area (by lorries)
For gasoline ： 108 lorries/d
For diesel： 111 lorries/d
0
Mon
0.2
0
Tanintharyi
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31
Condition for building the 200kbd refinery
In Mandalay area, new oil terminal and short circuit line should be
constructed
Oil terminal
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32
Refinery development schedule
It takes roughly 10 years for developing 200kb/d oil refinery.
General step for refinery development
Year 1
• Feasibility
Study
Year 2
• Deep
Feasibility
Study
- Site selection
- Feasibility
study on the
specific site
and condition
Year 3
Year 4
• Licenser
Selection
• Design by
Licenser
- Licenser for
making the
refinery layout
…etc
- Basic design
Preparation for EPC
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
Year 5
Year 6
• FEED
• EPC tender
- Basic design
by potential
contractor
- Tender for
selecting EPC
contractor
- Making
contract with it
Year
7～10
• EPC
EPC
33
Refinery development schedule
The suitable schedule for new refinery construction could be like
below.
(Reference) Demand in 2035 : 350kb/d
Development schedule for 200kb/d refinery and required infrastructure
Step1
Basic infrastructure
Development
(Demand : 100kb/d)
Step2
Infrastructure
Expansion
(Demand : 140kb/d)
Step3
Refinery completion
and Operation start
(Demand : 200kb/d)
FY2025~
FY2020
FY2015
•Feasibility study for
refinery construction
•Site selection for
large oil terminal
•Distribution infrastructure
development
•Terminal Expansion to
manage 200kb/d oil
products
•Completion of distribution
infrastructure
•Refinery operation start
•Expansion of distribution
infrastructure according to
the demand increase
•Expansion plan for refinery
•Refinery construction start
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34
Summary
MOE should develop oil industry master plan by integrating all the
points at issue from short and long point of view
The points at issue and directionality
Development of new
large scale refinery
Few potential sites
for large scale
refinery
Distribution
infrastructure
• Total oil products demand reach 200 kb/d in around 2025, and over 350kb/d in 2035.
• Without refineries, Myanmar will lose up to 2.8 billion USD in that moment.
• From the planning to the refinery operation, it will take about 10 years.
• Generally, the capacity of oil refinery should be over 200 kb/d to compete the international
products. For building it, deep sea port with 27m sea depth is necessary.
• The Southeast area like Thanbyuzayat is a potential site for it.
• To transport the large amount of oil products from refinery and with many topography
limitations in Myanmar, GOM should consider “ Modal Mix” by combining the several
transportations like railways, water transportation and etc..
 GOM should build a new 200kb/d refinery and import terminal during 2025-2030 at southeast of
Myanmar (example Thanbyuzayat)
 At the same time, GOM should develop an efficient domestic product distribution infrastructure
regarding that site as the start-up point.
 For realizing this idea, it should develop oil industry master plan at the earliest preferably in 2015.
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35
Next step
We are pleased to provide any support your making the systematic law
and regulation to realize the competitive oil industry with energy security
Table of contents (Image)
What to do?
Present condition analysis
1.
Key development direction
2.
Specific target
3.
Development plan of each value chain business

Oil refinery development plan

Effective distribution system

Modern retail business

Oil stock strategy
4.
Total investment
5.
Action plan
 Short – term
 Middle – term
 Long – term
 To collect the existing data and information through
related Ministries and private companies
 To make basic database which is supposed to be
updated once a year
 To analyze the present situations and pick up the
problems and challenges to be solved through the
database and information
Setting up future target and proper methodology
 To conduct study on the policies and regulations of
other countries as a benchmark
 To gather up suitable target and solutions
Conclude the analysis
 To put solutions into a financial / action plan
Japanese Government can provide
 The long term experiences and knowledge as
a regulator
 Assistance of writing down the concrete laws
and regulations
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36
Copyright（C） 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved.
37