MYANMAR: Insights, Challenges & InitiativesInternational LP Gas Seminar 2019, Tokyo, Japan, 5-6 March

Steve McBride, COO, Parami Energy

Varying Road Cultures

YANGONTOKYO

….Beware Pedestrians & Drivers!

Safety MomentDriving & Pedestrian Cultures

Parami Energy: Our Business

Upstream E&P Power Gen LPG

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Corporate Social Responsibility

Myanmar Insights

Myanmar Energy

3

• 14 States / Regions

• Population 55 Million

• Only 30-35% access to electricity

• MoEE Target: 100% by 2030

• 81% population use firewood &

charcoal for cooking *

• LPG supply approx. 100,000 MT

per annum

• LPG Supply Forecasts predict

increase of ~ 15% per year for next

5-10 years ^

Source: * Ministry of Natural Resources and Environmental Conservation ^ Gas Academy

Myanmar At a Glance

Source: IMF, ADB, World Bank, MOEP, MOE, DICA, UNFPA, Parami Energy Analytics

• 10 Million Households Nationwide

• ~ 70% of Households cook with Electricity

• Frequent power cuts, peak Load during meal times, and in summer

• Many households keep LPG as contingency

• Rapid Deforestation

Myanmar• Population 55 Million• Consumption 100,000 MT• Only 5% of Market Penetration

Myanmar

Thailand

Bangladesh

Vietnam

Gulf ofThailand

Cambodia

Laos

Malaysia

Bangladesh• Population 164 Million• Consumption 500,000 MT• Fastest Growing Market in

the World in 2017• LPG displacing Natural

Gas as a cooking fuel

Region Comparisons

Cambodia• Population 16 Million• Consumption 200,000 MT

Thailand• Population 69 Million• Consumption 4M MT• ~90 % penetration

Government LPG Licensing

US$ 1 =MMK 152326-Feb-2019

Parami Energy: Rental LPG Terminal (License A)

• Open Tender – 28/7/2017

• Awarding Letter – 18/9/2017

• Allowed Improvement,

Investment & Operation Nov 17

Myanmar Govt LPG Target

3

• MoEE objective is to migrate 1 Million

Households to LPG Cooking by 2020

• Legacy target 2 Million Households

• Yangon ~ 1 Million Households and

Mandalay ~ 400K Households

• Households cooking with LPG **

• Not all use LPG as a primary source

• Parami Energy aims to be a leader in

helping the Govt meet their objectives

~5%

Source: ** MPE

Yangon

Mandalay

Myanmar Challenges

HSE Culture & Energy Literacy

• HSE Culture requires significant

improvement to progress

• Leadership: Business and Govt

• Natural human tendency:

Cost focused …especially in a nation

with limited disposable income

• Market Survey (in urban areas)

reveals minimal awareness of health

risks … with focus on Cost, Kitchen

Cleanliness & Clothing Damage

• ”Energy Literacy” initiatives have

helped in the Thailand E&P sector

✓ Robust HSE Leadership✓ Energy Literacy Initiatives

Supply: Importation

3

• Thanlyn Terminal cannot receive a

VLGC due to limited draft

• Maximum size is 2000 MT / 95m

• Many vessels of this size are fully

occupied with booming markets

such as Bangladesh

• DW ports are being built

• But a long way from urban areas

with challenging internal

infrastructures currently

• Assured Origin of Cargoes

✓ Reliable long term partners for annual LPG supply

Myanmar

Bangladesh

• Complex urban distribution:

• Congested Urban areas of Yangon,

Mandalay and other State Capitals

• Remote Rural areas pose problems

across different dimensions

• Substantial Associated Investment

with Nascent Business:

➢ Cylinders & Filling Stations

➢ Warehousing & Security

➢ Delivery Transportation

Distribution & Investment

✓ Customised approach supported by mobile application technology

✓ JV Partnerships

LPG Regulation

3

• To ensure LPG industry grows safely

and provides a high degree of

confidence to the general population

• Avoid issues & incidents experienced in

other Asian countries, as well as globally

• World LPG Association (WLPGA) offers

guidance and counseling

• National LPG Association is needed with

appropriate Govt support

• Must be effective and pragmatic

✓ Establish inclusive LPG Association✓ Implement LPG Regulations

Electricity Competition

3

• High electricity subsides

• US$0.03/kWh & double that commercially

• Lowest price in ASEAN > Unsustainable

• Cost of supply is approximately 3x

• Has been a reluctance to amend due to

political sensitivity

• 100% access to electricity by 2030 will

require investment of > $30 billion (W.B.)

• Remove commercial subsidies• Reduce residential subsidies• Apply selective subsidies e.g. schools

✓ Introduce LPG Subsidy?

Myanmar Initiatives

Traditional LPG Industry Approach

Parami LPG Approach

Myanmar’s first Automatic Filling Carousel

Alternative Clean Energy Initiative Benefits:

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✓ Enhance Health and Well-Being

✓ Eliminate Premature Deaths due to

Indoor Air Pollution

✓ Reduce Electricity Consumption

(help National power conservation)

✓ Environmentally Friendly, contributing to

reduced deforestation (….another Govt

Ministry's objective)

✓ Convenient, Accessible & Transportable

✓ LPG is Very Safe .....

…when regulated!

▪ To develop a female-only

distribution network

▪ To empower Myanmar women by

providing a viable business

opportunity

▪ To promote leadership by Myanmar

women in developing communities

▪ One Parami Female “Champion” for

every Quarter in city districts

▪ Warehouses in Yangon to supply

Parami LPG to all the distributors

Parami LPG Female Distributor Initiative

Kick-Off Via Yangon Woman Associations

Aggressive Marketing Initiative

LPG CSR Initiative

Community Kitchen Project

#1 Hopong, Shan State (November 2018)

Community

Kitchen Project

#2 Magway

Region (April 2019)

Parami Energy and the Community : LPG CSR

Technology Synergies …..Off-Grid Power Gen

▪ Parami is currently

constructing 2 Mini-

Grid systems in

Central Myanmar

▪ Yesagyo is 288kw

Solar & 160kw

Diesel Gen-Set

▪ Assessing the

potential of using

LPG Engines

▪ Cleaner, more

efficient ……..but

not so economical

(with fixed Tariff)

WLPGA Initiatives in Myanmar

✓ Parami Energy: First WLPGA

Member in Myanmar

✓ We recognize the inherent

benefits that membership can

deliver to the industry.

✓ WINLPG preliminary session in

Nov 2018

✓ WINLPG Myanmar Chapter will

be formally launched in early

April 2019

✓ Parami COO is a WINLPG

Ambassador for SE Asia.

Myanmar (Burma) Represents A Significant

Opportunity, at the same time considering:

Market

• Urban Areas >> Subsidies

• Rural Areas >> Health & Environment

• Accelerate Rate of LPG adoption via enhancing

HSE practices and Energy Literacy

Government

• Regulations >> Implement and Reinforce

• Industry standards and practices >> Apply

• Incentives and Investment >> Introduce

PARAMI MISSION: Safe and Efficient Supply

From Jetty to Myanmar Family Kitchens

Summary

Japan has been investing and engaged in Myanmar without interruption for the past 77 years

Myanmar

A Profound Parting Thought:

ありがとうございましたArigatō Japan!

Japan

2019 LPG Events in Myanmar:

3rd - 4th

April 2019

12th – 14th

November 2019

Questions?