The proposed China-Myanmar gas pipeline could propel Myanmar’s economy in the 21st century. Pic: AFP

EXPERTS and economists say they are optimistic that discoveries of new natural gas reserves in Myanmar’s offshore blocks will boost the country’s foreign currency earnings.

According to figures from Myanmar’s Customs Department, Myanmar earned more than US$2 billion in the 2006-07 financial year by exporting natural gas to Thailand.

Myanma Oil and Gas Enterprise (MOGE) expects that to continue in years to come, especially when two new reserves in the Tanintharyi and Rakhine offshore blocks open up in 2010.

U San Lwin, an energy expert and former managing director of MOGE, said the newly uncovered gas reserves at A-1, A-3 and M-9 blocks managed by Daewoo International (South Korea) and PTTEP (Thailand) will contribute significantly to exports.

“Daewoo and PTTEP will inevitably develop the gas fields when they find them. So, I think the production of natural gas will clearly increase,” he said.
He said that based on his experience, developing a gas field takes about three years.

U Hla Maung, former executive director of Asia Development Bank and author of The World and Energy Crisis, said that increasing foreign currency earnings from gas sales will help develop the economy and enhance Myanmar’s financial stability.

“The more hard currency earnings we get from gas sales, the stronger our foreign currency reserves will be,” he said.

Increased gas revenues, he said, could help to spur less dynamic sectors of the economy.

U Hla Maung said that with deeper foreign currency reserves Myanmar could afford to relax import barriers and allow machinery and better technology to enter the country, which would boost production.

“If imports increased, domestic production would rise and exports in a number of fields would probably increase,” he said.

U Hla Maung said heightened competition for scarce energy sources in China, India and Thailand would probably force gas prices up, further boosting profits for Myanmar.

According to a list of Myanmar’s top 50 traders released by the Customs Department, MOGE was responsible for 43 percent of the country’s total earnings last year.

Its main money-spinner was the deal to supply natural gas to Thailand, which reaped some US$2.16 billion last year, an increase of more than $1 billion over the previous year.

MOGE’s earnings were particularly strong last year – more than double the previous year – mainly due to higher prices, rather than an increase in the amount of gas exported.

Myanmar exports one billion cubic feet of gas a day to Thailand from the two offshore natural gas projects at Yadana and Yetagun in the Mottama gulf, via a pipeline.

The Yadana natural gas project covers blocks M-5 and M-6, while Yetagun includes the M-12, M-13 and M-14 blocks that came on-line in 1998 and 2000 respectively.

Myanmar is currently the highest Asian exporter of natural gas via pipeline, and ninth overall in the world.

U Hla Maung said the proposed China-Myanmar gas pipeline will probably move natural gas from the A-1 and A-3 blocks to China’s Yunnan provincial capital of Kunming. He said would further increase export earnings and create employment opportunities for many people.