Myanma Petroleum Products Enterprise (MPPE) has invited private companies to form a joint venture for a project in the petroleum industry, through a tender published in a state-run newspaper. MPPE is one of Myanmar’s largest downstream players, although parts of it have been privatized. Around 70 private companies now operate the country’s 1,163 petrol stations, but few have storage facilities. MPPE owns four main fuel terminals, 24 sub-fuel terminals and 12 petrol stations. It no longer enjoys a monopoly on fuel imports, though MPPE continues to supply the government’s petroleum product requirements.
“We want to extend our facilities and capabilities to an international standard, and exercise quality control over the domestic market in a competitive market through this joint venture project,” explained a company official.
The state-owned enterprise has been preparing the tender documents for the past few months, with a view to re-entering the petroleum distribution market in partnership with a foreign firm. MPPE announced last year that it would issue a tender. The joint venture project will include the importation, storage, distribution and sale of all petroleum products, except liquefied petroleum gas (LPG) and liquefied natural gas (LNG). The joint venture company also will rehabilitate existing facilities and expand the business. It will be formed according to the Foreign Investment Law and Special Companies Act of 1950. The contract will be valid for 30 years, with the option to extend the agreement twice, by 20 years each time.
“This invitation to tender has been issued directly to private companies. There was no invitation for expressions of interest because we have already allowed interested companies to see our facilities,” the official said. These companies include JX Nippon and Sumitomo from Japan, Puma Energy in Singapore and PTT from Thailand. Singapore-based Puma Energy has been selected to become the first overseas company to run a private jet-fuelling business in Myanmar, following a separate invitation from MPPE for foreign involvement in a joint venture jet fuel business at Yangon International Airport.
Interested parties can purchase the tender documentation, which costs USD 10,000 and is non-refundable. In addition, to bid for the joint venture project, companies are required to pay a bond of USD 4 million.
Eligible companies must have at least 10 consecutive years of experience in petroleum trading, storage and distribution and at least three years’ trade volume of 2.7 million cubic metres of petroleum products per year.
The private petroleum distribution market is overseen by the Myanmar Petroleum Trade Association (MPTA), which is chaired by U Tay Za.