Oil Industry in Myanmar Challenges to overcome · 2019-05-13 · Myanmar energy supply structure...
Transcript of Oil Industry in Myanmar Challenges to overcome · 2019-05-13 · Myanmar energy supply structure...
Feb, 2015
Oil Industry in Myanmar
~ Challenges to overcome ~
Nomura Research Institute
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 1
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. 2
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: 35.2 MTOE
Key Factors
1. Government Policy 2. Energy Conversion 3. Foreign Investment 4. Energy/Environment Conservation
Total: 14.0 MTOE
2% 6%
12% 3%
77%
Coal and Peat
Crude Oil
Natural Gas
Renewables
Biofuels and Waste
2%
28%
27%
38%
6%
Coal and Peat
Crude Oil
Natural Gas
Renewables
Biofuels and Waste
Source : IEA
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 3
Population
Increase Expectation of
Economic Growth
FDI Increase
Economic
Growth
Energy
consumption
Increase Increase of
Oil products
Decrease of
Foreign currency
Reserve
Unstable
Financial Market
Limit the FDI
increase
Outflow of
the added value
Limit the economic growth
Impact of rising energy consumption on economy
Rapid increase in energy consumption can also become potential bottleneck towards economic growth of the country
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 4
Problems in Myanmar Oil Industry
There are mainly 4 problems in Myanmar Oil Industry
Problems exist in each value chain of oil industry
Refinery
Import
Storage
Transport
Wholesale
Retail
Problems Action by GOM
?
?
?
?
② Low competitiveness of
domestic products
③ Inefficiency of the
distribution system
④ Safe / Reliable Operation
a. Several small players
b. Smuggling/ illegal trade
c. Poor quality products
① Defic
ien
cy o
f go
vern
men
t
co
ntro
l / man
ag
em
en
t
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 5
② Low competitiveness of domestic products – refinery location in Myanmar
Myanmar has 3 refineries. However, the operation rate is considerably low.
Thanlyin
• 20,000 BPD
Mann
Thanbaykan
• 25000 BPD
Chauk
• 6000 BPD New Refinery
• 56,000 BPD plan
• With Thailand and
China company
Dawei
• 100,000BPD
• With Guangdong Zhenrong
Energy Co.Ltd.
Source:Opportunities For Co-operation In Petroleum Products
Myanmar
Location / capacity of refinery
Existing Refineries Refinery (Plan) 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%
Domestic production result / Operation rate
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 6
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. 7
③ Inefficiency of the distribution system – several small players
After privatization, basically private companies can conduct business freely except domestic product distribution
Thanlyin
refinery
(MPE)
Storage Wholesale / Retail Petroleum
products Production Importation
MPE(MPPE) ※Storage
within Thanlyin
MPPE gas
stations
State factories /
vehicles
Customer
Gasoline /
Petrol
(≒RON 70, RON87)
Private
Gas
Stations
Private vehicles
Octane-92
(RON92)
MPTA members
MPE(MPTA) (Storage within
Thanlyin)
Overseas
refineries
(e.g. Singapore) Private gas
stations
Private industries
(generator),
vehicles,
Diesel (including
Premium
Diesel) Private importers
(100+)
Private companies
(own storage)
State industries MPE MPE (MPPE) (Storage
within Thanlyin)
Private gas
stations Private vehicles
Buyer transfers on their
own rolls/ownership
Wholesale amount
is controlled
by MPPE
Overseas
refineries
(e.g. Singapore) MPPE Airport JET
MPE lease the
storage to MPPE
* Will change after
MPE JV project
Yetagon / Yadana
State-owned gas
stations CNG vehicles CNG
MPE MPE (MPPE) (Storage
within Thanlyin)
MPTA
members
MPPE
MPPE
Wholesale Retail company
SOE Private Company
Private companies Private
industries
Private company
should join MPTA
to procure oil
products from
abroad
MPTA rents storage from MPE
Overseas
refineries
(e.g. Singapore)
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 8
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
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 8,700
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 5,500 29,000 7,700
ST Oil Shwe Taung Group of
Companies 15 - 3,000 7,800
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
17 + 3
(planned)
• 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
17 + at least
3 to expand
• 3 tanks, ( 2 1-million gallons tank,
1 3-million gallons tank) , 5 barges 21,000 - 3,000
Thuriya Energy Dagon Group of
Companies 3 - 2,500 1,600
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.
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 9
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.
The main area where
smuggling products enter
central region of Myanmar
through sea way
Source)各種公開情報および現地調査結果よりNRI作成
Arrows show where fuel
product supplies flow into
border areas
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 10
5.9
0.80.4
1.7
8.8
0
2
4
6
8
10
実績値 NRI推計
輸入量 Thanlyin生産量 Mann/Chauk生産量 差分 NRI
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
Source)NRI forecast
(KB/D)
Statistics NRI
Estimation
Import Production
(Thanlyin)
Production
(Mann / Chaulk) Demand
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 11
Specification MPE set for import product
Source: MPE Thanlyin refinery
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
(3hrs@500) max 1
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
Corrosion(3hrs@50deg,C) No.1 max
Ash,mass% 0.001 max
Viscosity at 40deg, C, cst 1.7-5.5
Pour Pant,deg, C 9 max
Conradson Carbon Resdue,
mass% 0.1 max
Water & Sediment, Vol % 0.05max
Sedimnet by extraction. % mass 0.01 max
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.
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 12
Unsafe discharging operation
Source: MPE Thanlyin refinery
③Inefficiency of the distribution system – poor quality product
Unsafe and illegal operation are spreading all over the conutry.
Illegal retail shops
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 13 Source:MPPE
Distribution amount of Gasoline
(KL)
④ Deficiency of government control / management
Keeping the illegal trade aside, MOE should try to figure out the present situation of oil industry.
10
3 93
98
11
3
11
3
11
3
11
2
10
9
11
0
12
4
12
9
0
20
40
60
80
100
120
140
160
180
200
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
? ? ?
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.
As nobody has grasped the correct
present demand of oil products, it is
difficult to forecast the future.
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 14
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
Refinery
Import
Storage
Transport
Wholesale
Retail
Thanlyin Refinery JV Project
For gasoline
JV Project for Gasoline
distribution(MPPE)
その他 For diesel
JV Project for Diesel
distribution(MPPE)
JET
JV Project for jet fuel distribution
(MPPE)
Bitumen Import/Wholes
ale (MOT)
Already bided Plan to bid
Unclear demarcation Between MPE and MPPE
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 15
(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. 16
(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.
FOREIGN
INVESTMENT
LAW:
Enacted on
2 Nov, 2012
Stipulations
announced on
31 Jan, 2013
Source) MIC Notification, Foreign Investment Rules 31/1/2013 (Unofficially translated by Myanmar Legal Service)
Stipulations of the new Foreign Investment Law (Unofficial translation)
Oil Refining
Importation Transportation,
store and marketing
To obtain the
approval of the Union
Government
To obtain and follow
the Ministry of
Energy’s terms and
conditions
Foreign investment is possible in all downstream VC activities (certain restrictions apply)
Re
str
ictio
ns
• 1-15. Petrol chemical plants
including manufacturing of
petroleum, various kinds of
petrol, fertilizers, waxes, and
varnishes
• 9-1. Importation and
marketing of petroleum and
petroleum based products
as raw materials
• 9-5. Transportation, store,
and marketing of oil,
natural gas and petroleum
products
No
tes
✓
✓
✓
3.1) Allowed with the relevant ministry‘s recommendations 3.3) Requiring environmental
impact assessments
• 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
Petrol chemical plants Petroleum chemical plants
To obtain the approval of the Union Government
To obtain and follow the Ministry of Energy’s
terms and conditions
• Depending upon the
business activity
• Allowed only after
conducting initial
study and assessment
upon environmental
and social impacts
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 17
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. 18
24.9 36.3 43.5 46.8 49.9 53.3 56.8 60.7 64.8 69.2 74.0 79.1 84.6 90.5 96.8 103.6 111.0 118.9 127.5 136.7
146.6 157.3
168.9 181.4
194.9
26.9
31.3
44.4 46.5 49.4 52.5
55.7 59.2
62.9 66.9
71.1 75.6
80.3 85.4
90.8 96.6
102.7 109.2
116.2
123.6
131.5
139.9
148.8
158.4
168.5
0
50
100
150
200
250
300
350
400
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
ジェット燃料 重油 軽油 ガソリン
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.
(KB/D) Oil product demand by product in Myanmar
Source)NRI analysis
(91.4)
(373.6)
(268.1)
(193.6)
(140.8)
(102.9)
JET Fuel Oil Diesel Gasoline
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 19
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.
(Unit:KL/d)
2013年 FY2035 FY2013
Oil Product demand by area
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 20
2013年
(Unit:KL/d)
FY2035 FY2013
Gasoline demand by area
Except Yangon area, demand of gasoline will increase in the area around Mandalay
Gasoline demand by area
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 21
(Unit:KL/d)
FY2035 FY2013
Diesel demand by area
Diesel demand by area
Diesel demand continue to increase mainly in Yangon area
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 22
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.
15.9% 19.7%
3.3%
12.9% 10.7%
23.8%
31.2%
20.5% 25.1% 24.9% 25.4%
15.2% 16.1%
33.6% 39.0%
29.1%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
-
0.50
1.00
1.50
2.00
2.50
3.00
3.50
2006 2007 2008 2009 2010 2011 2012 2013
Pric
e d
iffere
nce
b
etw
ee
n c
rud
e o
il an
d o
il pro
du
cts
Pric
e
(USD
/Ga
llon
)
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)
Source)http://www.eia.gov/dnav/pet/pet_pri_spt_s1_d.htm
Price trend of Crude oil and Oil products
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 23
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.
Item Condition
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
Requirements for building a 200kb/d refinery
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 24
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)
①333m
③29m
②60m
③20m
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 25
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
Source : MOE, JEPIC
Resource Reserve
Hydro > 100 GW(Estimated)
Crude Oil Onshore 102 MMbbl (Proved reserve)
Offshore 43 MMbbl (Proved reserve)
Natural Gas 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
Export
100kbd
Refinery *
4years
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 26
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 Pros Cons
A.
Kyaukphyu
• 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
• 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
• Far from the main
demand areas
(単位:KL/d)
A. Kyaukphyu
D. Dawei
C. South area of Mon
(Karego、Ye…etc)
B.Man
Thanlyin
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 27
Conditions for building the 200kbd refinery
Suppose that Thanbyuzayat or Ye could be the best place for the new refinery.
Boundary line
(Depth of water > 30m)
Dawei
Ye
Mawlamyine
Source)http://mdnautical.com/i-bay-of-bengal/6906-british-admiralty-
nautical-chart-826-yangon-rangoon-river-to-heinze-islands.html
Ye
Mawlamyine
Thanbyuzayat
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
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 28
Condition for building the 200kbd refinery
(Reference) Potential site for 200kb/d refinery in Thanbyuzayat.
Existing railway
Expansion line
for transportation
2 k
m
2 km
Potential site for
200kb/d refinery
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 29
Condition for building the 200kbd refinery
Large scale distribution infrastructure is necessary for 200kb/d size refinery.
Product BP/D
( Barrel per
day)
KKL Sea transport Railway Lorry Pipeline
vessels
(20m * 6m * 2m) Tanker (6000kl) Lorries Trains 12KL/unit
Crude 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 -
Propylene 2,040 1 1.1 0.1 7 0.4 28 -
Sulfur 321 1 0.2 0.0 1 0.1 4 -
Refinery Fuel 8,500
Total (Unit / day) 105.4 5.3 - 29.0 2,636 -
Transportation capacity (Assumption : transport all products from refinery by single transportation type)
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 30
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
Refinery ~ Yangon
⇒Distribute by vessels
Lorries
Railway + Lorries
Water transportation ++Lorries ●←Refinery /
/ Import terminal
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 31
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)
For Dawei area (by 6000KL tanker)
For gasoline:0.1 tanker /d
For diesel:0.1 tanker/d
For Yangon area (by 6000KL tanker)
For gasoline:2.6 tankers/d
For diesel:2.9 tanker/d
For Sittwe(by 6000KL tanker)
For gasoline:0.02 tanker/d
For diesel:0.1 tanker/d
To Mandalay area (by trains)
For gasoline : 11.9 trains / d (20 cars set)
For diesel : 11.2 trains/d (20 cars set)
To Mon area (by lorries)
For gasoline : 108 lorries/d
For diesel: 111 lorries/d
80
75
70
75
80
85
Mandalay
97
106
90
95
100
105
110
Yangon 0.8 0.8
0
0.5
1
Mon
0.1
0.5
0
0.2
0.4
0.6
Rakhine
0.4
0.5
0
0.2
0.4
0.6
Tanintharyi
Gasoline
Diesel
Unit : kb/d
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 32
Condition for building the 200kbd refinery
In Mandalay area, new oil terminal and short circuit line should be constructed
Oil terminal
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 33
Refinery development schedule
It takes roughly 10 years for developing 200kb/d oil refinery.
General step for refinery development
Year 7~10
Year 1 Year 6 Year 5 Year 4 Year 3 Year 2
• EPC • EPC tender
- Tender for
selecting EPC
contractor
- Making
contract with it
• FEED
- Basic design
by potential
contractor
• Design by
Licenser
- Basic design
• Licenser
Selection
- Licenser for
making the
refinery layout
…etc
• Deep
Feasibility
Study
- Feasibility
study on the
specific site
and condition
• Feasibility
Study
- Site selection
Preparation for EPC EPC
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 34
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)
Step3 Refinery completion and Operation start
(Demand : 200kb/d)
FY2015
Step2 Infrastructure
Expansion (Demand : 140kb/d)
FY2020
FY2025~
•Refinery operation start
•Expansion of distribution
infrastructure according to
the demand increase
•Expansion plan for refinery
•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 construction start
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 35
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
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.
• 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.
Development of new large scale refinery
• 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.
Few potential sites for large scale
refinery
• 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..
Distribution infrastructure
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 36
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)
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
What to do?
Present condition analysis 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
Copyright(C) 2014 Nomura Research Institute, Ltd. And JX Nippon Oil & Energy Corporation. All rights reserved. 37