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Focusing on Myanmar

Hydrocarbon Engineering,

Following on from overviews of the storage markets and what can be done to improve them at Tank Storage Asia, a presentation was given by Martjin Coopman of Royal HaskoningDHV focusing on Myanmar.

Country overview

Until 2011 Myanmar was essentially closed to the global markets but between 2012 and 2013, things changed dramatically and the country picked up fast. There is however still uncertainty as it is still unsure if the country is to become democratic or not. But despite this, Coopman said that the potential is there.

The population of Myanmar is 50 million but this was not known until 2014 when the country’s first census was carried out. It was also revealed in the census that 70% of the population is Burmese. The topography of the country is interesting and challenging when it comes to logistics and infrastructure. There is a river that runs the full length of the country and two mountain ranges, one of which blocks access to the Indian ocean easily by river, however, despite this an oil and gas pipeline is planned to cross the country in to China. Challenges are also to be faced in the country due to the extreme natural conditions, including typhoons, flooding and cyclones. Also, a major fault line runs through the country and this is the exact location of a new planned port. The port will also be impacted by underground volcanoes, which are directly inline with its access channel.

When it comes to growth expectations, it is Yangoon and Mandaly that Coopman highlighted as hot spots. Especially Mandaly as it is a crossroads region within the country.

Fuel market

The fuel market in the country is at the moment very low and the majority is required for transport, power and the large mining industry in Myanmar. However, as the country has now opened up, it is anticipated that tourism will increase and this will mean that jet fuel and kerosene demand will increase so the fuel market will hopefully become more buoyant. The demand for diesel is expected to double when democracy in the country is settled as mining levels are anticipated to increase and improve.

The port sector

Myanmar is home to nine deepsea and official sea ports and three special economic zones. Kyaupyu is the biggest port in the country and has good access to China. China, Coopman said, wishes to invest fully in the port, however, Myanmar is reluctant to relinquish its entire grip on the facility and independent companies are being encouraged to invest in it. However, Coopman did pose the question of the port being too expensive for Myanmar, so maybe China will be encouraged to invest fully in the facility in the future.

Coopman highlighted Yangoon as it is big in terms of import and equipment levels. The port currently has a capacity to handle 1 million tpy however, there is big growth potential for another 25% of capacity to be added. The downside to the port however is that it is home to two sand bars, one of which has to be dredged every day and this is not a very efficient situation to be in. Plans have been proposed for a deepsea portion to be added to the port, but, as Coopman pointed out, this is very unlikely to happen due to the previously mentioned sand bars. Big harbour plans have also been proposed for the port, but developers and investment is needed and that, as previously discussed, could be determined by the political situation.

The Thilawa port is currently under development. There are 37 plots available however, they are very small and currently being bought in groups by construction companies and investors. The plot land owners are, according to Coopman, not all looking to give up the plots they own at the port entirely but are looking for financial partners to construct facilities on them so that they may benefit in to the future when the port is completed and established in the market.

The future of the port sector in Myanmar was discussed briefly by Coopman to conclude his presentation. A west coast port option is being discussed within the country and Ngatok Bay has been tabled as an option. Also, a deepsea port is needed so Coopman asked ‘is Yangoon an option?’ Looking at the river that runs through the country, there could be the possibility of a port and terminal set up on it, however the access to the river is very shallow so that will have an impact on the size of vessel that can gain admission. The Dutch government is however looking very closely into this option and has already funded a study of the river as a whole.

Written by Claira Lloyd

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