A worker pours biodiesel derived from jatropha curcas seeds into a vehicle’s fuel tank during a demonstration at Sedona Hotal in Yangon last week.

A K30 billion energy deal could be a huge step forward for Myanmar’s production of renewable energy. The deal, with a South Korean company, could lead to the setting up of a refinery in Myanmar.

The source of the renewable energy is jatropha Curcas, a biodiesel crop grown in Myanmar. South Korean biofuel giant Enertech, and Myanmar Agri-Tech (MAGT) signed a preliminary memorandum of understanding (MoU) covering the production, export and refining of the fuel in Yangon on November 5.

Mr Serge Pun, chairman of both Myanmar Agri-Tech and the First Myanmar Investment companies, said the deal had been in the pipeline since late 2006.
“Our first agreement covers 5000 metric tonnes of jatropha curcas crude oil that we will ship to South Korea over the next 12 months,” he said.

Jatropha curcas seeds and crude oil are inspected by attendees of a demonstration at the Sedona Hotel last week. Pic: Hein Latt Aung

“It is an important milestone in the development of renewable energy sources within Myanmar. And it’s something that MAGT has been working on since December 2006,” he said during the signing ceremony at the Sedona Hotel.

“We are a market-leading producer and supplier of jatropha curcas in the region,” Mr Pun added.

MAGT is a subsidiary of FMI, which is one of Myanmar’s few public companies.
The company owns and manages a 100,000-acre jatropha curcas plantation between Pathein and Mawtin in Ayeyarwady Division.

This project was developed using Golden Hope Plantation Board, which is a Malaysia-based biofuel consultancy firm, following a government call to seek alternative biofuel sources to feed the nation’s growing thirst for diesel.

Under the terms of the agreement MAGT will grow, harvest and partially process the jatropha curcas seeds, eventually producing oil that Enertech will then import into South Korea, where it will be refined into biofuel.

The plantation has an estimated price tag of K30 billion, with each acre costing K300,000 or thereabouts, including labour charges.

Neither company would reveal information concerning the price that Enertech will pay for each tonne of crude oil bought from MAGT. However, none of the refined biodiesel will be sold back to Myanmar, it will all be consumed domestically.

The MoU was signed by Mr Serge Pun and Enertech’s chairnmant, Mr Kim Sung Soo.

The productivity rate of jatropha curcas per acre is expected to yield three tonnes of jatropha curcas, which produces one tonne of crude oil, said Mr Pun.

“We are just in MoU status now. If it is OK, both sides will consider setting up a refinery in Myanmar,” he said. A refinery plant for the production of bio fuel would require a total estimated investment of at least US$20-30 million.

Construction would depend on many requirements from both the company and the local authorities, he added.

In addition to its Ayeyarwady Division plantation, MAGT is set to open four branches to collect Jatropha Carcus seeds, in Kyaukpadaung, Taung Gyi, Aung Pan and Kyauk Me.

MAGT is collecting seeds from farmers all over the country to produce a huge supply of jatropha curcas crude oil for the export market.

MAGT is planning to provide technical or financial assistance to farmers to produce more jatropha curcas on a commercial scale in the future, Mr Pun told the annual general meeting of the First Myanmar Investment Company on November 5.

“We will be able to continue our operation as long as we have the right to export in the international market,” he said.