Japan's METI sees no immediate impact on Myanmar energy projects after coup

Tokyo — Japan's Ministry of Economy, Trade and Industry does not see any immediate impact on the energy businesses of Japanese companies in Myanmar after the military seized power on Monday, detaining State Counselor Aung San Suu Kyi and other senior members of the Southeast Asian country's ruling party.

"We have not heard any impact on operations or projects in Myanmar," a ministry source said Feb. 1, adding that the ministry is closely monitoring the developing situation.

Japanese companies surveyed by S&P Global Platts said Feb. 1 that they are carefully collecting information on developing situations and carefully monitoring potential impact on their projects in Myanmar.

JX Nippon Oil & Gas Exploration, which produces and sells natural gas from the Yetagun gas field in Block M-12/13/14 offshore Myanmar, said the company is collecting information over the situation.

An official for Marubeni, which represents a Japanese consortium with Sumitomo and Mitsui for an LNG-to-power project in Myanmar, said the company is gathering information and monitoring situation in Myanmar and declined to elaborate further.

Marubeni's representatives at is Yangon branch are being instructed to stay at home to ensure their safety, following a notice from the Japanese embassy, the official said.

Japanese companies are among the largest foreign investors in Myanmar's energy sector.

In response to the situations in Myanmar, the Japanese government has called on the release of Suu Kyi and other detained officials, Minister of Foreign Affairs Toshimitsu Motegi said Feb. 1, while providing information to Japanese residents to ensure their safety.

Increased uncertainty

The coup has taken a lot of the civilian population by surprise, and with communications halted in several areas there is uncertainty about how the situation will evolve, a shipbroker with business in Myanmar said.

He said that due to concerns around civil unrest and violence, some activity at ports and industrial areas around downtown Yangon had visibly slowed, while local markets were expected to close early, and it was too early to say what will happen next.

Over the last several years, Myanmar's transition to democracy and a government led by Suu Kyi's party, the National League for Democracy, saw its economy open up to international investments even as sanctions were lifted.

This paved the way for countries like Japan to invest heavily in several sectors including energy and infrastructure.

One of the flagship Japanese investments was the Myanmar Japan Thilawa Development Limited special economic zone, set up with the backing of the two governments, and comprising businesses and consortiums from Japan and Myanmar. The success of Thilawa was expected to pave the way for a multi-billion dollar Japanese investment in the Dawei SEZ in the south.

The Thilawa SEZ located around 25 km southeast of Yangon city was the site of Myanmar's first LNG-to-power project built by CNTIC VPower Group Holdings, a joint venture between China's China National Technical Import and Export Corp and Hong Kong-based VPower Group.

Japan's Marubeni, Sumitomo and Mitsui are also planning an LNG-to-power project in Thilawa, which will include a 1,250 MW regasified gas-fueled thermal power plant and onshore LNG receiving, storage and regasification facility.

The coup

On Monday, media reports said the military-backed Vice-President U Myint Swe, who was serving as interim president, declared on the military-run Myawaddy network a state of national emergency and handed over all powers to the current military Commander-in-Chief Senior General Min Aung Hlaing for a one-year term.

The move came after the military disputed recent election results. The reports also said that Suu Kyi, President U Win Myint and other ministers and members of the ruling party had been detained by the military, while internet and telecommunications were cut off.

Meanwhile, other countries in the region have issued advisories, with Singapore asking its citizens to consider deferring non-essential travel to parts of Rakhine State, as the security situation is fluid and has the potential to deteriorate quickly.

The US has expressed grave concern and alarm on reports that the Burmese military has detained multiple civilian government leaders, including Suu Kyi, and civil society leaders.