Govt will in­vite ten­ders to build two re­finer­ies

The gov­ern­ment will soon in­vite ten­ders for the con­struc­tion of at least two oil re­finer­ies, which it says are ur­gently required due to ris­ing de­mand and higher oil prices.

The Myanmar Times - Weekend - - Front Page - CHAN MYA HTWE chan­myahtwe@mm­times.com

THE gov­ern­ment will soon launch ten­ders for the con­struc­tion of at least two oil re­finer­ies, now “ur­gently required” on the back of ris­ing de­mand and higher oil prices, which has led to a much higher petrol im­port bill of late.

“We will need one big oil re­fin­ery to cover ex­pected de­mand for prod­ucts like petroleum in the next 20 years. Myanmar needs to pro­duce value-added oil prod­ucts. This will in­volve huge in­vest­ments,” said Daw Phyu Phyu Aung, Chief Process En­gi­neer from State-owned No.1 Than­lyin Re­fin­ery.

“As im­port­ing petrol when de­mand and costs are ris­ing is a waste of money we will in­vite in­ter­na­tional in­vestors to bid for the work, which will be un­der a joint ven­ture ar­range­ment with the gov­ern­ment. The terms and con­di­tions of the ten­der rounds are now un­der re­view,” she said.

The In­dia Oil Com­pany is among the com­pa­nies in dis­cus­sion with the gov­ern­ment, The Myanmar Times un­der­stands.

When the process is com­plete, an open ten­der for two fa­cil­i­ties will be launched and an­nounced. This will in­clude the re­fur­bish­ment of one ex­ist­ing State-owned re­fin­ery in Mann Than­ba­yarkan, Magwe and a sec­ond re­fin­ery in Than­lyin, also Sta­te­owned, which is ca­pa­ble of pro­cess­ing 50,000 bar­rels of oil per day.

The Mann Than­ba­yarkan re­fin­ery was built to process up to 26,000 bar­rels of oil per day. How­ever, due to its in­land lo­ca­tion, the re­fin­ery is not able to utilise its full ca­pac­ity.

The Than­lyin re­fin­ery is able to re­ceive up to 2 mil­lion tonnes of oil crude oil via the China-myanmar pipe­line. It also has ex­ist­ing ter­mi­nals and other re­fin­ing fa­cil­i­ties, Daw Phyu Phyu Aung said.

There are cur­rently three Sta­te­owned re­finer­ies in Myanmar, in­clud­ing the two up for ten­der at Than­lyin and Mann Than­ba­yarkan. The re­finer­ies have been dor­mant as the gov­ern­ment does not have the bud­get to up­grade and op­er­ate them.

“We can only re­open these re­finer­ies when we have the funds. Cur­rently, we are un­able to up­grade them due to the huge in­vest­ments required,” she said.

The plants, which are more than 60 years old, will also in­volve costly main­te­nance and up­keep to run. “The plants will be com­mer­cially vi­able only if we can pro­duce and sell high-value prod­ucts,” Daw Phyu Phyu Aung said. Since their estab­lish­ment, only mi­nor main­te­nance work has been con­ducted at the re­finer­ies.

“We need new tech­nol­ogy and in­vest­ments to re­vive and de­velop this in­dus­try,” Daw Phyu Phyu Aung said.

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