A consortium of three Japanese trading houses, together with local partner Eden Group, has received the go-ahead for a liquefied natural gas (LNG) power project in Myanmar.

The country's Ministry of Electricity and Energy (MOEE) has granted the joint venture – comprised of Marubeni Corporation, Mitsui & Co, Sumitomo Corporation, and the Myanmar-based conglomerate Eden – exclusive rights to develop, operate and own a 1,250-megawatt (MW), LNG-fuelled thermal power plant, plus an onshore LNG receiving, storage and regasification facility located in the Thilawa port area on the outskirts of country's capital of Yangon.

The project sponsors have lined up a 25-year power purchase agreement with Electric Power Generation Enterprise (EPGE), a state-owned company that operates under MOEE.

The consortium is now carrying out a detailed feasibility study, a process that will take one to two years.

According to Sumitomo, rapid economic growth in Myanmar has tightened the electric power supply and demand balance, and independent power projects by foreign investors are seen as a means to help expand the supply.

Sumitomo is already involved in developing and operating an industrial park within Myanmar’s Thilawa Special Economic Zone, which has one of the highest levels of electric power demand in the country.

Myanmar is a relatively new user of LNG, and projects thus far have relied on floating regasification facilities rather than onshore infrastructure.

The first phase of an LNG-fired power station, located in Thaketa township in the eastern part of Yangon, went online in June. It comprises a grid of around two hundred small generators, whose LNG source is a ship with a regasification unit.

The 477MW project, awarded in late 2019 through a public tender, is a joint venture between China National Technical Import and Export Corporation (CNTIC), Hong Kong-based independent power producer VPower Group, and local partner RGK+Z&A Group.

The power facility was built on a fast-track basis as one of the Myanmar government’s shortlisted critical projects designed to boost power supply.

The power station commenced operation in phases starting in June 2020. Electricity generated by this power station will be transmitted, via the national grid, to support nationwide electricity demand and, in particular, that of the Yangon region.

In addition to this project, CNTIC and VPower are going to deliver more electricity to the country with another two power projects that were also awarded to the consortium in the LNG power project public tender.