Government will launch tenders for upgrade, of two oil refineries

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 State-owned, 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 State-owned 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.

Source: Myanmar Times

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