Myanmar Chemical & Machinery company (MCM) will fork out over US$ 96 million to build an offshore base on Made Island, Rakhine State

Myanmar Chemical & Machinery Co (MCM) will fork out over US$96 million (K130 billion) under the Myanmar Citizen Investment Law to build an offshore supply base on Made Island in Kyaukphyu, Rakhine State, project director U Tin Soe told The Myanmar Times.

The location lies along the 1,000-mile Rakhine-to-Kawthoung coastline, where a host of international oil companies are currently conducting oil and gas exploration works across 37 offshore blocks in Rakhine, Moattama and Tanintharyi.

Earlier this month, gas was discovered at Block A-6, off the coast of Southern Rakhine, at water depths of up to 4,570 meters. Two earlier discoveries, at 200 meters and 2,034 meters respectively, were made in 2012 and 2015. Now, plans are being laid out for a fourth well to be drilled at Block A-6. 

To meet the anticipated demand for offshore storage and personnel housing services when production begins at those fields within the next few years, Myanmar will need its own offshore supply base situated nearby. 

Currently, the nearest offshore storage and housing platforms are in Singapore and Thailand, which are both expensive and at least 4-5 days away by boat. So if there is a local base along the coastline near Rakhine, Moattama and Tanintharyi to service drillers operating in Myanmar, travel time could be cut down by half.

“Myanmar  has no international-standard supply base. We need to have one to service the international oil companies here, who now have to pay Singapore and Thailand to use their storage platforms. These additional costs and time incurred are burdens for many companies.” U Tin Soe said.

As there is no such supply base in Myanmar yet, companies are racing to build its first. In fact, when the government invited tenders for the construction of an offshore supply base in Myanmar, 52 local and international firms submitted applications

In May, local oil and gas services provider Myint & Associates was given the green light by the Myanmar Investment Commission (MIC) to construct the first supply base at the Nga Yoke Kaung Bay area in Ayeyawady Region. This month, Myanmar Offshore Supply Base (MOSB), a Singapore company, received MIC approval to construct a second offshore supply base in Mon State.

The Myanmar Times understands that another company, SIM Co, received approval to build a base within the same area earlier this year, according to a SIM interview with Dealstreet Asia.  

MCM’s offshore supply base was approved by the MIC during the first week of August. The company expects to start repaying its citizen’s loan in nine years. Its project will include a 600-meter jetty, warehouses to store exploration materials, pipes and fuels, workshops, waste management systems and a helipad.

The project will be built on 200 acres of land on Made Island. To avoid disputes with the locals, MCM has purchased 150 acres of the land and intends to buy the remaining 50 acres, it is learnt.

Construction is expected to take two years starting from September 2017. By December 2018,  a third of the  jetty  and some others facilities should be completed, said U Tin Soe.

The project will be exempted from tax in the first seven years. Starting from its eighth year, the State will receive US$6 million in tax revenues from the project. More taxes will be levied depending on the project’s yearly income.

The project will employ over 100 staff, including local residents, it is learnt.

(The Myanmar Times: http://www.mmtimes.com/news/made-island-offshore-supply-base-receives-green-light.html-0 )

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