China Development Bank provides EUR 185.6 million loan for Yadana-Yangon Natural Gas Pipeline Construction Project (Linked to Project ID#98030, 98031)

On December 20, 2009, China Development Bank and Myanmar Oil and Gas Enterprise (MOGE) — a state-owned oil and gas company in Myanmar — signed an EUR 185.6 million loan agreement (ID#5300942322009591489) for the Yadana-Yangon Natural Gas Pipeline Construction Project. The borrowing terms of the loan were as follows: a 20 year maturity, a 5 year grace period, and a 4.5% interest rate. The borrower had made principal repayments worth EUR 35.92 million and interest repayments worth EUR 62.39 million as of March 31, 2018. The loan’s amount outstanding was EUR 162 million (in loan principal and interest) as of March 31, 2017 and EUR 194.22 million (EUR 149.68 million in loan principal and EUR 44.54 million in loan interest) as of March 31, 2018. The purpose of the project was to construct a 24-inch diameter, 287 km long pipeline that supplies natural gas from the Yadana Offshore Natural Gas Region in the Andaman Sea to the gas distribution station (Ywama) of Yangon. The 24-inch (610 mm) pipeline has 151-kilometer-long (94 mi) offshore and 136 kilometers (85 mi) long onshore sections. The pipeline has capacity of 150 million cubic feet per day (4.2×106 m3/d). CNPC was the EPC contractor responsible for project implementation. The pipeline became operational on June 12, 2010. The Yadana gas field is located in the Andaman Sea, approximately 60 kilometres offshore the nearest landfall in Myanmar. This major energy resource contains more than 5.3 trillion cubic feet (150 billion cubic meters) of natural gas, with an expected field life of 30 years. Commercial production began in the year 2000 and production averaged more than 21.5 million cubic meters per day in 2007. There are some indications that the CDB loan for the Yadana-Yangon Natural Gas Pipeline Construction Project may have financially underperformed vis-a-vis the original expectations of the lender. In 2020, CDB and the Government of Myanmar signed a debt suspension agreement as part of the G-20 Debt Service Suspension Initiative (DSSI). Under the terms of the agreement, the lender agreed to suspend principal and interest payments due between May 1, 2020 and December 31, 2020 under 5 loan agreements (as captured via Project ID#98030). Debt service payments under these loan agreements were again deferred in 2021 (as captured via Project ID#98031).

Additional details

1. This project is also known as the Yadana-Yangon 24 Gas Pipeline Project, the Yadana Natural Gas Pipeline Construction Project, the Yadana Gas Pipeline 2 Project, the Yadana-Yangon 24 Gas Pipeline Project, and the Yadana Yangon Gas Pipeline Project. The Burmese project title is ျမန္မာ-တ႐ုတ္ သဘာ၀ဓာတ္ေငြ႔ပုိက္လုိင္း. 2. The Yadana gas field and pipelines are operated by Total S.A., a French energy group, with Chevron Corporation, a United States-based company, as its junior partner along with PTT, a Thai state-owned oil and gas company, and Myanmar Oil and Gas Enterprise (MOGE), a state-owned enterprise of Myanmar. Operator of the gas field is Total. Total has working interest of 31.2%, Chevron 28.3%, PTT 25.5%, and MOGE 15%. 3. The CDB loan that supported this project is not included in the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020. 4. The amounts outstanding data are drawn from EITI reports. See https://www.mopf.gov.mm/sites/default/files/4th%20MEITI%20Report.pdf and https://eiti.org/files/documents/meiti_reconciliation_report_2017-2018_final_signed_31st_march_2020.pdf

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