Although the minister came to the State Department in September, it is his first meeting there with Clinton, and it is expected to be marked by the naming of first U.S. ambassador to the country in more than 20 years.

The Obama administration announced back in January that it would normalize diplomatic relations with Myanmar. The current special envoy to the country, Derek Mitchell, is tipped to become ambassador.

More uncertainty surrounds the Obama administration’s plans — announced after democracy leader Aung San Suu Kyi’s election to parliament in April — to ease a ban on American investment in the country also known as Burma. The ban, introduced in 1997, comes up for its annual renewal on Sunday.

The administration is expected to revise the ban. It has previously said it would allow targeted investment in Myanmar but has yet to spell out how that will be done and faces problems in untangling the myriad restrictions currently in place.

U.S. businesses and some lawmakers are pushing for economic sanctions to be lifted and point to the European Union’s recent suspension of its restrictions, which could now leave American corporations at a competitive disadvantage — not least in the potentially lucrative oil, gas and mining sectors.

Human rights groups are concerned that the Obama administration is moving too fast to reward the reforms of President Thein Sein, despite the continuing detention of hundreds of political prisoners and ethnic violence.

Democrat Sen. Jim Webb, a longtime advocate of engagement with Myanmar who is among several senators who will meet with Wunna Maung Lwin, said the visit was an “appropriate time” to lift economic sanctions and said President Barack Obama has the executive authority to do so.

Republican Sen. John McCain has been a little less forthright and won a cautious endorsement Tuesday from Suu Kyi, whose opinion is key to shaping U.S. policy.

McCain said sanctions should be suspended while the U.S. maintains restrictions against individuals and entities that violate human rights and “plunder the nation’s resources.” He said American companies should not do business with state-owned firms dominated by the military and should adhere to established standards of corporate responsibility.

The devil of such restrictions would be in the detail. If U.S. companies were barred from working with state-owned enterprises like the country’s oil and gas company — which is currently not included on a U.S. list of blacklisted Myanmar entities — that would effectively exclude them from the petroleum sector, where the previous military regime earned billions.

Human Rights Watch is demanding the imposition of binding rules on corporate responsibility for U.S. companies working in Myanmar and revision of the blacklist that has not been updated for at least three years.

“Tough rules are needed to ensure that new investments benefit the people of Burma and don’t fuel human rights abuses and corruption, or end up strengthening the military’s control over civilian authorities,” John Sifton, the group’s Asia advocacy director, said in a statement.
NECN

President and CEO Kitti Jivacate yesterday said UAC would likely see the plant, which will purify biogas from dung and wastewater from the Mongkol and Sons pig farm in Chiang Mai, ready to start supplying biogas to the energy conglomerate by the end of July.

The biomethane from the droppings can be turned into natural gas for vehicles.

The CBG plant will have a |production capacity of 6 to 8 tonnes per day, or about 3,000 tonnes per year.

With a 15-year supply contract with PTT, UAC expects to realise sales of about Bt50 million annually from the project, starting from the third quarter of this year.

The company also plans to invest about Bt600 million in a petrochemical plant in Sukhothai, he said. The facility is expected to commence operations within the first quarter of next year and earn Bt300 million in annual revenue.

The plant will produce liquefied petroleum gas, compressed natural gas and natural gas liquid.

Sales of the new plant’s output are currently under negotiation with a leading domestic energy company, Kitti said.

UAC is also considering setting up a branch office in Myanmar. It is carefully studying the regulations, laws and taxes in the neighbouring country, and a clearer picture of the plan should emerge late this year, he added.

With the planned investment, UAC expects to generate annual revenue of about Bt2 billion within the next three years.

Revenue this year is forecast to reach Bt1 billion, 85 per cent of which is expected to come from its core business of chemical-product trading, and the rest from joint ventures.

In the first quarter, the company recorded a net profit of Bt37.47 million, up 4.53 per cent from the same period a year earlier.

Sixty-seven per cent came from the trading of chemical products, and the remainder from joint ventures in alternative energy and BBF (business biofuel).

EIN News

Yangon, May 16 (IANS) Myanmar drew over $270 million in the first three months of 2012, a media report said.

Much of it went into the oil and natural gas sector ($247 million), while mining drew nearly $20 million, reported Xinhua.

Britain injected most investment in natural gas and mining (nearly $100 million).

According to official statistics, Myanmar attracted $8.46 billion in foreign investment in 2011.

Total foreign investment in Myanmar hit $40.42 billion in 458 projects as of January 2012 since the country opened to such investment in late 1988.

Of the 31 countries and regions investing in Myanmar, China led with $13.94 billion (34.5 percent), followed by Thailand with $9.56 billion.

EIN News

May 15, 2012

(Washington, DC) – The US government should not ease sanctions on business activities in Burma until adequate safeguards are in place to prevent new investment from fueling human rights abuses. A US presidential order imposing a ban on investment and financial services in Burma is scheduled to expire on May 20, 2012, unless it is renewed or revised.

In early April, in response to Burmese government pledges of reform and electoral gains by Burma’s main opposition party, US Secretary of State Hillary Clinton announced that the US government was prepared to relax certain business-related sanctions. A new presidential order easing business restrictions is expected to be issued soon.

“The US government should not reward the Burmese government’s nascent and untested changes by allowing an unregulated business bonanza,” said John Sifton, Asia advocacy director at Human Rights Watch. “Tough rules are needed to ensure that new investments benefit the people of Burma and don’t fuel human rights abuses and corruption, or end up strengthening the military’s control over civilian authorities.”

In two recent joint letters to President Barack Obama and his senior advisers, Human Rights Watch and other organizations expressed concern that the administration would lift business-related sanctions before progress was made on key reform efforts. The groups noted that a current US Treasury Department list of “Special Designated Nationals”­– people and companies implicated in human rights abuses in Burma with whom American companies are banned from doing business – had not been updated for at least three years, and needed to be corrected based on new developments.

“The US government shouldn’t lift investment restrictions unless it first updates the Treasury Department list,” Sifton said. “Otherwise US companies could end up going into business with human rights abusers.”

Secretary Clinton, when she announced plans for a “targeted easing” of sanctions in early April, pledged that, “Sanctions and prohibitions will stay in place on individuals and institutions that remain on the wrong side of [Burma’s] historic reform efforts.”

Undertaking business in Burma raises a variety of human rights related risk factors, Human Rights Watch said. These include: weak rule of law and a judiciary lacking independence, the military’s extensive involvement in the economy as well as its use of forced labor and other abusive practices in connection with providing security for business operations, poor regulation and enforcement of labor and environmental laws, widespread corruption, and the mismanagement of public funds. The Burmese government is dominated by the military, which under Burma’s constitution enjoys legal supremacy over civilian authorities.
Human Rights Watch called on the US government to develop and impose binding, enforceable rules prior to permitting new business activities by American companies. In developing appropriate safeguards, the government should hold more extensive consultations with nongovernmental groups inside and outside Burma.

In April, the European Union announced a “suspension” of sanctions for one year. The suspension is likely to be permanent since reimposing sanctions would require consensus from every EU member country, which is highly unlikely given the new business opportunities, Human Rights Watch said. Other governments, including Australia, Canada, and Switzerland, have also announced in recent weeks that they would remove sanctions. Some governments have called for businesses to engage responsibly but none have mandated binding standards.

“It’s not sound policy to relax sanctions just because other countries are doing so,” Sifton said. “The U.S. has led the international community in pressuring Burma to reform and it should continue to do so.

Specific recommendations to the US Government
Human Rights Watch identified several key elements for business standards in Burma that should be featured in any US decision to relax sanctions:

A careful, calibrated approach featuring the gradual and select easing of sanctions tied to concrete progress on reform in Burma and based on close consultation with nongovernmental groups inside and outside Burma.
Screening of investment and other business activities. Prior to allowing any American company to invest or otherwise engage in business in Burma, the US government should undertake pre-screening processes to review and approve proposed US business activity, taking into consideration its potential impact on human rights and armed conflict. Scrutiny should include activities that companies may carry out under contract for foreign or Burmese companies. Activities that entail a considerable risk of harmful impacts should not be permitted to proceed.
A prohibition on any business engaging directly or indirectly, with individuals or entities linked to human rights abuses, including the Burmese military and militias, the military’s private-sector allies, and state-owned businesses.
A prohibition on involvement in any activity that entails large-scale appropriation or leasing of land, whether from private or public entities.
An explicit requirement that companies respect human rights and undertake thorough due diligence procedures to prevent rights abuses and remedy them if they arise. Such requirements are consistent with accepted international standards reflected, for example, in the 2011 OECD Guidelines on Multinational Enterprises, and should be made binding for Burma. Among other elements, required procedures should include independent and transparent human rights impact assessments that address all relevant social and environmental concerns, as well as the preparation of human rights implementation or mitigation plans.
Imposition of binding measures to enforce all applicable obligations, subject to verification and with tough penalties for non-compliance, including fines and withdrawal of permission to invest in Burma.
Mandatory public reporting requirements for all companies permitted to do business in Burma, including the publication of social and environmental impact assessments, full contract transparency, and the timely and detailed disclosure of all payments made to the government of Burma.
An effective complaints mechanism accessible to individuals and communities in Burma and those representing them who allege harmful conduct or impacts by US companies investing or doing business in Burma, with findings and decisions binding on companies.
A requirement that companies affirm that they submit their activities in Burma to the legal jurisdiction of US courts, including activities involving subsidiaries or sub-contractors, or activities companies carry out as a contractor for another party. In addition, the US government should take all necessary steps to ensure that judicial avenues are available to provide recourse to victims and accountability for human rights violations.

Human Rights Watch highlighted several human rights-related risk factors for business in Burma, include the following:

The extensive role of the military and its closest business allies, who dominate many sectors of the economy and are more likely to benefit from new business deals than ordinary Burmese citizens.
The abysmal human rights record and absence of accountability of Burma’s security forces, which continue to carry out serious abuses in Kachin state and repression in other parts of the country. The military has a track record of using forced labor and engaging in illegal land confiscation, forced displacement, and unlawful use of force against villagers, among other serious abuses, in the context of clearing land and providing security for business projects.
Inadequate domestic regulation and enforcement on key issues such as environmental protection, resulting in business activity that has harmful consequences for human rights.
Persistent labor rights problems. Despite recent legislative reform efforts, serious labor rights problems persist in Burma, including forced labor in ethnic and conflict zones and sweatshop labor conditions in factories, including excessive hours, low wages, and health and safety violations.
Major tensions over the acquisition and use of land, which has been a flashpoint for forced evictions and other human rights abuses. Such problems are especially likely to arise in connection with extractives industries (oil, gas, and mining), major infrastructure projects (e.g., hydroelectric dams), timber, agribusiness and large-scale tourism projects.
Lack of community consultation, consent, or benefit in government-approved projects. Local communities in Burma have little or no say in how land and natural resources are used by businesses. Although these communities bear the costs of such projects, for example in terms of displacement and lost livelihoods, they have no effective means to secure adequate compensation or to ensure that the government channels the proceeds to promote socio-economic development and poverty alleviation. Recently passed laws such as the Farmland Bill, and the Vacant and Fallow Land Bill, fail to guarantee rights to land.
Opaque and unaccountable management of government revenues. The immense revenues Burma has generated from exports of natural gas, which are slated to rise dramatically once twin oil and gas pipelines to China are completed, have bypassed the national budget and fueled outsized spending on the military. Recent moves to bring those revenues on-budget and adjust spending priorities have been insufficient. Despite modest increases in social spending, health and education still receive a minimal share of the budget, while spending on the military, down as a percentage, is up overall.
Rampant corruption. The country is tied with Afghanistan for the second-worst ranking in the 2011 Transparency International Corruption Perception Index. Only North Korea and Somalia fared worse.

Related Materials:
Burma: Joint Letter from NGOs to U.S. Administration
The US government should not reward the Burmese government’s nascent and untested changes by allowing an unregulated business bonanza. Tough rules are needed to ensure that new investments benefit the people of Burma and don’t fuel human rights abuses and corruption, or end up strengthening the military’s control over civilian authorities.
John Sifton, Asia advocacy director at Human Rights Watch

Human Rights Watch

South Korean President Lee Myung Bak met with Myanmar President Thein Sein and pledged greater economic support while discussing ways to curtail the former Southeast Asian dictatorship’s military ties with North Korea.

Lee offered expanded loans and aid during yesterday’s meeting in the capital of Naypyidaw and the two leaders agreed to increase cooperation on energy and resource development according to a statement from Lee’s office. Thein Sein asked Lee to set up a redevelopment program in the former capital of Yangon, according to a South Korean presidential official speaking on condition of anonymity.

The visit highlights South Korea’s effort to seek a stake in the energy-rich nation as it moves away from five decades of military rule and opens its markets. Lee will meet democracy advocate Aung San Suu Kyi today in the first trip by a South Korean leader to Myanmar since North Korea attempted to assassinate one of his predecessors almost 30 years ago.

“Myanmar is welcoming South Korean investment and aid because it needs to have a balanced and diversified sources of aid to reduce economic risk,” said Choi Myeong Hae, senior research fellow at Samsung Economic Research Institute in Seoul. “Lee’s visit reinforces how much South Korea values Myanmar as a strategic center and definitely boosts opportunities for South Korean businesses.”
Beans, Jade

Myanmar lawmakers are revamping the financial system after holding the most inclusive elections in two decades on April 1. Thein Sein, who took over from Than Shwe in March 2011, signed a preliminary cease-fire with the country’s largest armed rebel force in a move to end the world’s longest civil war.

Lee will meet Suu Kyi in Yangon today and hold a joint press conference. Suu Kyi took her seat in parliament this month after spending 15 years under house arrest, affirming a political opening in a nation where only one person in 30 has a mobile phone. The U.S. is lifting certain economic and financial sanctions on Myanmar and Japan last month forgave about $3.7 billion in debt.

South Korea is the fourth-largest investor in Myanmar after China, Thailand and Hong Kong. South Korea invested $110 million in Myanmar last year, according to Korea Export-Import Bank and an aggregate of $2.94 billion, Myanmar Investment Commission’s figures say.
Manufacturing Hub

Trade between the two countries amounted to $966 million in 2011, according to South Korean government statistics. Myanmar exported $299 million worth of clothing, beans, marine products, jade and timber to South Korea and imported $667 million of South Korean motor vehicles, engines, spare parts, tin and steel products, and raw plastic materials.

“About 170 South Korean companies are already in Myanmar and that number will only grow, especially those in the garment industry and raw material manufacturing,” said Choi of SERI. “Myanmar’s strategic location and labor costs cheaper than Vietnam and China has great significance as manufacturing hub.”

Daewoo International Corp. (047050)’s natural gas project is expected to cost $1.7 billion and may begin production in May 2013. The trading company, which is controlled by steelmaker Posco (005490), is also South Korea’s biggest rice trader. Daewoo rose 2.4 percent yesterday to close at 29,700 won. The benchmark Kospi fell 3.4 percent.
Weapons Trading

Thein Sein denied to Lee that his country is aiding North Korea’s nuclear development program and the two discussed ways to suspend Myanmar’s military ties with the North, the South Korean presidential official said. The Myanmar president agreed to follow United Nations resolutions sanctioning new leader Kim Jong Un’s regime for its long-range rocket and nuclear tests.

U.S. Secretary of State Hillary Clinton in her visit in December expressed concern that Myanmar might be engaged in weapons trading with the North. The U.S. has blocked North Korean ships thought to be carrying arms to Myanmar.

Myanmar resumed diplomatic relations with the North in April 2007, having cut ties after the 1983 assassination attempt on South Korean Chun Doo Hwan that killed about 20 people, including the South Korean deputy prime minister and foreign minister. The incident took place as Chun was paying his respects at a mausoleum commemorating Suu Kyi’s father, Aung San.

Tensions on the Korean peninsula are high after Kim’s government last month defied international pressure and fired a rocket that disintegrated, prompting speculation it will detonate a nuclear device to reassert itself. The U.S. in response to the launch canceled a food aid deal and the United Nations tightened existing sanctions.

The Obama administration has repeatedly cited Myanmar’s opening as a possible model for North Korea to follow.

To contact the reporter on this story: Sangwon Yoon in Seoul at syoon32@bloomberg.net

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

Businessweek

AAP

Two of Asia’s biggest stock exchanges are fighting for dominance in the world’s hottest new frontier market, as investors beat a path to Burma, following the end of decades of military rule.

The operator of the Tokyo Stock Exchange announced last month a deal with Burma’s central bank to open a stock market, along with Japan’s Daiwa Securities, after years of discussions.

Executives from Asia’s largest bourse plan to travel to Burma later this month to sign the agreement.

But they face competition from South Korea, whose exchange also aims to open a stock market in the former pariah state, according to a spokesman for Korea Exchange in Seoul.

Its director recently visited the capital Naypyidaw for talks with Burma’s central bank governor about developing the country’s capital markets.

But experts say the Japanese are unlikely to let the opportunity slip away.

“The Japanese need it more and they’ll be very, very competitive about getting into that market,” managing director for IHS Consulting in Singapore Tony Nash told AFP.

He said there was a sense that the Tokyo Stock Exchange felt left out of recent consolidation between global market operators and needed “a growth enhancer to make them a little more attractive in terms of an exchange tie-up”.

The Japanese consortium has stolen a march on the Koreans, thanks to a little-known but 16-year-old stock market tucked away in a crumbling building in downtown Yangon, offering over-the-counter deals in two stocks.

The Myanmar Securities Exchange Centre, a joint venture between Daiwa’s research arm and the government-run Myanma Economic Bank, has a skeleton staff of about 10 and just a few customers visiting every day.

But it is a market minnow with big ambitions, aiming to transform itself into a fully-fledged bourse by 2015 using the technology and trading platforms of the Tokyo Stock Exchange.

Its low turnover is not due to a lack of interest. The two stocks listed – a bank and a timber company, both majority-owned by the government – offered attractive dividend yields of about 25 to 30 per cent last year.

“Share trading is very tiny – there are so many buyers, but no sellers,” Myanmar Securities Exchange Centre managing director Shigeto Inami said in an interview at the bourse’s offices, where a small board displays the day’s prices of the two stocks printed on sheets of paper the old-fashioned way.

As well as interest among Burmese, foreign investors are eager not to be left out of what could be Asia’s next big economic boom, as the European Union and other countries start to roll back sanctions.

But investing in a country whose economy has been left in tatters by nearly half a century of military rule is not without risks.

“Due to its location, population and resources, Myanmar (Burma) is the holy grail for frontier investors, but it is still early in its reform process,” said Douglas Clayton, founder and chief executive officer of Cambodia-based Leopard Capital, which specialises in emerging markets and plans to launch a Burma fund.

“There are severe capacity constraints in human resources and physical infrastructure. Myanmar is simply not ready to absorb the tidal wave of projects foreigners can imagine starting there,” he said.

Much of Burma’s industry is currently controlled by companies owned by the government or their cronies, although the government’s economic reforms could lead to increased competition from new rivals.

But the real goldmine – abundant oil, gas and other natural resources – are largely dominated by foreign companies, with the exception of logging. Most of these companies are unlikely to be listed on the local stock market.

Even those that are listed may not be willing to sell their shares to overseas investors for now.

While there is no law against foreigners holding Burmese stocks, taking even a small stake means the company has to change its status to a foreign company, leading to restrictions in areas such as land ownership, said Inami.

His message for prospective foreign investors?

“I recommend them to marry a Myanmar lady and to buy in the name of the wife,” he said with a smile.

Such drastic measures may not be necessary for long, however, as the new quasi-civilian government seeks to overhaul its antiquated laws introduced during decades of rule by a repressive junta.

A new investment law, expected to be enacted later in the fiscal year, could pave the way for more companies to list their stocks on the Myanmar Securities Exchange, said Inami.

“There are so many good companies here in Myanmar, but they are waiting for the new companies act and securities exchange law,” he added.

Businessspectator

Yet while investors salivate over one of Asia’s last frontier markets, experts warn that nerves of steel may be needed.

“Myanmar is an incredible long-term opportunity, but patience and hard work will be required. You can’t modernise a substantial nation overnight,” said Clayton.

The state-owned China Petroleum and Chemical Corporation (Sinopec) demonstrated its massive appeal from the global investors when it garnered an overwhelming order book of USD19 billion for its three-tranche bond offering totaling USD3 billion.

This was the largest order book generated by a Chinese issuer in the international bond market, exceeding the USD17 billion attracted by CNOOC and US12.3 billion by China National Petroleum Corporation (CNPC), which both priced their deals in April. The offering, issued through Sinopec Group Overseas Development (2012) Limited, was the largest global bond issue among the Chinese state-owned enterprises.

Equally split at USD1 billion, Sinopec priced on May 10 a Reg S/144A five-, 10- and 30-year tranches well inside their initial guidance. The five-year tranche was priced at 99.717 percent with a coupon of 2.75 percent to offer a yield of 2.811 percent. This represented a 205bp over the US treasuries, or 20bp tighter than the initial guidance of 225bp.

The 10-year tranche was priced at 99.697 percent with a coupon of 3.90 percent to offer a yield of 3.937 percent. This was equivalent to a spread of 210bp over the US treasuries, likewise 20bp inside the initial guidance of 230bp. The 30-year tranche was priced at 99.672 percent with a coupon of 4.875 percent to offer a yield of 4.896 percent. This represented a spread of 185bp over the US treasuries, similarly 20bp tighter than the initial guidance of 205bp.

The deal represented Sinopec’s debut in the straight bond market, having sold a USD200 million convertible note in 1996.

“Sinopec is a great name to bring to the market and it is a top flight global player,” says a banker familiar with the deal. “There was a lot of focus during the roadshow from key accounts, which indicated their interest to participate in the transaction.”

Sinopec held a global roadshow that ended on May 9 in New York. The deal was announced during Asia hours on May 10 with an initial guidance of 225bp for five years, 230bp for 10 years and 205bp for 30 years, with the order book building steadily and was in excess of USD4.5 billion by lunch time. The book continued to grow in the afternoon and by Asia close, it was more than USD14 billion, with a healthy split across the three tranches.

On that basis, the arrangers revised the price guidance pretty aggressively and the deal was printed 20bp tighter than the initial guidance across all tenors. Sinopec was nimble during the process as the bond offering was executed within 24 hours. There was a lot of market volatility during the week, which saw some deals out of Asia really struggled.

In terms of comparables, Sinopec’s all-in yield was 2bp tighter than CNPC on 10 years and 15bp tighter than CNOOC on 30 years. The bonds performed in the secondary market, with the 2017s quoted at 199bp, the 2022s at 205bp and the 2042s at 183bp in the afternoon of May 11.

The five-year tranche attracted a total demand of USD6 billion from 354 accounts. The bonds were allocated 38 percent in Asia, 37 percent in the US and 25 percent in Europe. More than half of the paper, or 53 percent, was sold to asset and fund managers, 18 percent to banks, 10 percent to private banks, five percent to insurance companies, and 14 percent to public institutions and other investors.

The 10-year tranche generated a total demand of USD5 billion from 308 accounts with 46 percent of the bonds distributed in the US, 32 percent in Asia and 22 percent in Europe. Asset and fund managers bought 70 percent of the bonds, banks 11 percent, insurance companies seven percent, private banks five percent, and public institutions and other investors seven percent.

The 30-year tranche had the biggest slice of the order book at USD8 billion from 317 accounts, manifesting the increasing investor interest on longer dated paper. Asia accounted for 51 percent of the paper, the US 34 percent and Europe 15 percent. Asset and fund managers were allocated 57 percent, insurance companies 25 percent, private banks 10 percent, banks five percent, and public institutions and other investors three percent.

Citi, HSBC and BOC International acted as the joint global coordinators for the transactions, as well as joint bookrunners along with Barclays, Goldman Sachs, J.P. Morgan, Mizuho Securities and UBS.

The Asset Magazine

A COMPRESSED natural gas pipeline near Htantabin in Yangon Region ruptured on May 5, spewing natural gas into the surrounding area for eight hours before the supply was shut off, a Myanmar Oil and Gas Enterprise official said last week.

The leak, which also caused a fire, was reported by a MOGE official at 7:30am on May 5. “The incident happened in the field and therefore, nobody was injured,” he said.

The pipeline, which runs from Nyaungdon in Ayeyarwady Region to Ywama in Yangon Region, supplies natural gas used to power many of Yangon’s taxis and buses.

A crew of eight MOGE personnel travelled to the site of the leak and worked until it was repaired at about 4am on May 6.

“We finished the repair early on May 6 and restarted the gas flow soon after the repair. CNG stations in Yangon were fully supplied again by 8am on May 6,” said the official.

U Soe Thein, a taxi driver whose car runs on CNG, said he had waited for nearly two hours on May 5 to buy fuel, a process that normally takes 15 minutes.

MyanmarTimes

PTT EXPLORATION and Production International (PTTEPI) signed contracts for construction work at its Zawtika gas project in the Gulf of Mottama on May 7, the company said.

The signing ceremony took place in Yangon at the Chatrium Hotel.

PTTEPI contracted the tasks of building processing and living quarters to Singapore-based SMOE Pte Ltd, a recognised leader in the engineering and construction of offshore production platforms, a PTTEPI official said. The official said the work is expected to cost US$360 million.

The company also contracted transportation, installation, hook-up and commissioning of Zawtika’s processing and living quarters platform to Straits Offshore Pte Ltd (SOPL), also based in Singapore, on the same day in a deal worth $57 million.

“In developing the gas field, PTTEPI will deliver gas through a 28-inch pipeline across a distance of about 300 kilometres [to Thailand],” said Mr Suksant Ongvises, construction project manager of the Zawtika project.

Mr Ho Nee Sin, managing director of SMOE Pte Ltd, said the company was informed that it had won the contract in May last year and has been buying equipment since.

“Our project team is doing the steel work, which we expect to complete by early August and will be followed by the installation of equipment,” he said.

“And we are on track for the timely fabrication of the living quarters as well,” he added.

In November 2011 PTTEPI contracted India’s Larsen & Turbo Ltd to build Zawtika’s three wellhead platforms, with the onshore export pipeline and associated facilities contracted to China Petroleum Pipeline Bureau.

The offshore component of Zawtika project’s pipeline will be about 230km while the onshore section crossing Tanintharyi Region’s Dawei district and Yayphyu township is about 70km.

Zawtika is a joint PTTEPI and Myanma Oil and Gas Enterprise project, with the former to receive 80pc of the revenues from the sale of gas under the production sharing contract.

Most of the gas – 240 million cubic feet a day (mmcfd) or 80pc – will be exported to Thailand with the rest, 60mmcfd to be used for domestic use. Ministry of Energy statistics state that the Zawtika field contains reserves of 1.4 trillion cubic feet of gas.

MyanmarTime

Natural gas from the pipeline being supplied to Kyunlyashay Fertilizer Plant from Nyaungdon Natural Gas Station leaked near farmland of U Ngwe Tun, east of Magukyun Village in Kangyidaunt Township at 7.15 am on 1 May.

A dutiful people informed the leak of natural gas of the authorities in time and officials could repair the natural gas pipeline.

Security officials said that such leak of natural gas was for the second time in Kangyidaunt Township; and three months ago, the natural gas pipeline leaked between railroad and motor road in Dakah.

New Light of Myanmar