Myanmar’s Largest Oil Refinery Project Cancelled

Construction of a multi-billion-dollar oil refinery in the south of Dawei has been cancelled after an investor in the project ran into financial constraints, sources confirmed.

If completed, the oil refinery would have been the largest in Myanmar. The project, which is backed by the Chinese, had received approval under the former government led by then president U Thein Sein.

When contacted by The Myanmar Times, U Aung Naing Oo, secretary general of Myanmar Investment Commission (MIC) confirmed that the project was cancelled during a meeting held in mid-November.

The decision was made after military-linked Myanmar Economic Holdings Limited (MEHL), the Myanmar investor of the project, submitted a proposal to pull back the project, citing no progress at all in the two years since receiving approval.

“MEHL submitted the official report about not being able to implement the project to MIC. The main problem is the Chinese investor has not shown any progress since the project was approved. And MIC accepted the cancellation of the project,” he said.

The estimated $2.6 billion project was to be constructed by Chinese developer Guangdong Zhenrong Energy Co. It would have been the first oil refinery built by the company.

The Chinese had negotiated for a 70 percent stake in the project together with a consortium of investors including MEHL, state-owned Myanma Petrochemical Enterprise (MPE) and Yangon Engineering Group, which is controlled by the Htoo Group.

The site of the project would have been on 1,634 acres of land owned by MEHL,  directly in front of Tizit beach, with pipelines cutting through the nearby villages.

In fact, many residents in nearby Hnyin Maw village had raised concerns over being forced to relocate should construction have taken place. More than 2,000 residents from 6 nearby villages have so far signed a petition calling for the project to be scrapped within 2 months of receiving MIC approval.

U Mg Mg Aye, vice chair of Dawei Nationalities Party and resident of Hnyin Maw village voiced doubt over how the area could sustain this multi-million dollar project.

“All the villagers are very glad that the project has been cancelled. I think the objection from the community played a small part in the cancellation of this project,” he said.

U Hla Myo, General Manager of Planning Department of MEHL disagrees though. He said the Chinese investor had failed to make progress and that MEHL is abiding by MIC regulations.

“They [Guangdong Zhenrong] have to show progress in implementing the project in three stages one year after receiving approval from MIC. But the foreign investor has failed to do so because of financial difficulties. So we submitted a request to MIC to cancel the project,” he said.

U Hla Myo insisted the project was cancelled not because of government objections or community complaints, but because of the financial difficulties faced by its Chinese investor.


Source: Myanmar Times


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