Chinese power firms lobby Myanmar to buy Russian gas

Chinese power firms lobby Myanmar to buy Russian gas

Russian suppliers will only agree to G-to-G deals because of worries about sanctions

Power lines are seen near Pathein, Myanmar. (Photo: mohigan via Wikimedia Commons)
Power lines are seen near Pathein, Myanmar. (Photo: mohigan via Wikimedia Commons)

Chinese companies operating in Myanmar’s electricity generation sector have asked the junta for assistance in importing liquefied natural gas (LNG) from Russia, the news outlet Frontier Myanmar reported Thursday.

Citing a leaked memo from the Ministry of Electric Power in July, the magazine reported that Chinese companies involved in power project requested but failed to get “help” to import Russian LNG following a supply and cash crunch.

Hong Kong-listed VPower Group International Holdings Ltd and China National Technical Import and Export Corp (CNTIC) are in a joint-venture power plant project that involved importing LNG cargoes. The companies signed a five-year power purchasing pact with Myanmar’s Electric Power Generation Enterprise in 2020.

The Chinese companies are the latest to feel the pinch from sanctions levelled against Myanmar and its lucrative energy sector after the junta seized control of the country in a coup last year.

“We contacted Russia to buy LNG but they do not want to sell directly to a company, they only want to sell government-to-government,” the companies said in a memo that was cited by Frontier, adding that a meeting took place on July 25. “At present, we are having difficulty getting LNG and US dollars.”

VPower denied it was involved in LNG procurement, saying the company didn’t have business dealings with any Russian entities. CNTIC and its parent company, China General Technology Co, didn’t immediately respond to emailed requests for comment.

Maj Gen Zaw Min Tun, the lead spokesman for the State Administration Council, the official name of the military government, did not immediately respond to a request for comment. Soe Myint, director-general at the Ministry of Electric Power, said discussions were under way on “all these issues” but denied that there were direct requests to import LNG from Russia.

Shunned by most other countries, Myanmar’s military government has drawn closer to Russia with junta leader Min Aung Hlaing visiting the country twice since July. During his latest trip earlier this month, he heralded budding ties and heaped praise on President Vladimir Putin “as a leader of the world.”

The two countries agreed to use the barter system for fertiliser imports to Myanmar from Russia, while its fuel oil purchases from the country will be paid in roubles.

The central banks of Myanmar and Russia are also in discussions about direct payments in rouble and kyat. The country will soon allow the use of Mir cards, a Russian card payment system for electronic fund transfers, and enable the Bank of Russia’s messaging system to facilitate bilateral trade and investment.


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