N E DO- I C-OOER3 1

Feasibility Study on Reduction of Greenhouse Gas

Emissions at Thanlyin Oil Refinery

by the Modernization of Existing Facilities

March, 2001

New Energy and industrial Technologies

Development Organization (NEDO)

Entrusted to Cosmo Engineering Co, , Ltd. 020005096- Feasibility Study on Reduction of Greenhouse Gas Emissions at Thanlyin Oil Refinery by the Modernization of Existing Facilities

Cosmo Engineering Co., Ltd. March, 2001

Study Purpose;

At the Third Conference of the Parties to the United Nations Framework Convention on Climate Change (COP 3), "The Kyoto Protocol” defining a target of the reduction of greenhouse gases such as carbon dioxide for the industrialized countries was adopted to prevent the ongoing global warming. Here, the international remedies such as "Jointed Implementation (JI)” and “Clean Development Mechanism (CDM)" are determined to flexibly trade the amount of the countries’ reduction through actual implementation of projects. Japan should also utilize these means to achieve our target. This report summarizes the survey for a project of energy saving and greenhouse gas reduction by introducing modern refinery facilities to Thanlyin Refinery, Myanma Petrochemical Enterprise and for future CDM. NEDO—IC—OOER31

Feasibility Study on Reduction of Greenhouse Gas

Emissions at Thanlyin Oil Refinery

by the Modernization of Existing Facilities

March, 2001

New Energy and Industrial Technologies Development Organization (NEDO) Entrusted to Cosmo Engineering Co., Ltd. Preface

This report summarizes “The 2000 Basic Investigation on Collaborations and Others: Feasibility Study on Reduction of Greenhouse Gas Emissions at Thanlyin Refinery by Modernization of Existing Facilities” carried out by Cosmo Engineering Co., Ltd. in commission by “New Energy and Development Organization (NEDO).”

First, as the background of this investigation, we should mention the Third Conference of the Parties to the United Nations Framework Convention on Climate Change (COP-3) in December 1997. The Kyoto Protocol defines the target that the industrialized counties should achieve 5% reduction of the greenhouse gases, such as C02, by 2008 to 2012 based on the amount generated in 1990. As for Japan, we should reduce the amount by 6%. In addition, the convention suggested the international remedies such as “Jointed Implementation, JI,” among the industrialized countries and "Clean Development Mechanism, CDM,"between the industrialized countries and the developing countries and “Emissions Trading”

At Thanlyin Refinery of Myanma Petrochemical Enterprise, Myanmar, we expect the possibility of reducing a large amount of the greenhouse gases, C02 and Methane Our field survey will lead to an effective energy-saving project to improve the crude oil distillation unit and the coker plant. Also, this survey aims the possibility of applying "CDM."

Lastly, we hope this report will effect the implementation of the project and appreciate many officials of Myanmar’s Energy Planning Department, business people in MPE and many other people concerned for their cooperation.

March 2001 Cosmo Engineering Co., Ltd. Contents

Preface

Contents

Summary

Chapter 1 General 1.1 Internal Situation in Myanmar ...... 1-1 1.1.1 Political, Economical and Social Situation ...... 1-1 1.1.2 Energy Situation ...... 1-8 1.1.3 Necessity for a Clean Development Mechanism (CDM) Project ••• 1-12 1.2 Necessity for Introduction of the Energy Saving Technology in the Target Industry ...... 1-14 1.3 Significance, Necessity and Dissemination Effect on Related Industry • 1-15

Chapter2 Concretization of the Project 2.1 Project Planning ...... 2-1 2.1.1 Overview of the Project Area ...... 2-1 2.1.2 Contents of the Project ...... 2-6 2.1.3 Greenhouse Gases and Others Targeted Gases ...... 2-7 2.2 Overview of the Project Site ...... 2-8 2.2.1 Interests of the MPE ...... 2-8 2.2.2 Conditions of the Related Facilities (Overview, Specifications and Operation Conditions) of the Project Site (MPE) ...... 2-9 (1) Overview of The Facilities at MPE Thanlyin Refinery ...... 2-9 (2) Operation Conditions at MPE ThanlyinRefinery ...... 2-13 (3) Refining System Studied ...... :...... 2-18 (4) Analysis of the current operation ...... 2-46 2.2.3 Project Capability at the Project Site (MPE) ...... 2-69 (1) Technical Skills ...... 2-69 (2) Management System ...... 2-69 (3) Management Basis and Policies ...... 2-70 (4) Financial Capability ...... 2-72 (5) Human Resources Power ...... 2-73 (6) Implementation structure ...... 2-73 2.2.4 Project Contents at the Project Site (MPE) and Specifications of the Modified Facilities ...... 2-74 (1) Energy-Saving Plan by Replacing the Heat Exchangers in Heat Recovery System ...... 2-74 (2) Furnace ...... 2-80 (3) New Power Plant (Item -F) 2-89 (4) Recovery of Steam Loss (Item -G) ...... 2-90 (5) Modernization of Cooling Water System (Item -H) 2-91 (6) Off-Gas and LPG Recovery (Item -J and K) ...... 2-92 (7) Modernization of Intermediate Product run-down System (Item -L) 2-94 2.2.5 Scope of the Project: Funds, Facilities and Services ...... 2-96 (1) Scope of work by the Japan Side ...... 2-96 (2) Scope of work by the Myanma Side ...... 2-96 2.2.6 Conditions and Issues for the Implementation ...... 2-96 2.2.7 Project Schedule ...... 2-97 2.3 How to Finance ...... 2-98 2.3.1 Fund Plan to Implement the Project (Amount, Arrangement, etc) ...... 2-98 2.3.2 Fund RaisingPlan ...... 2-100 2.4 Conditions of CDM(Clean Development Mechanism) ...... 2-101 2.4.1 Cordination for Realization of CDM ...... 2-101 2.4.2 Possibility of Approval as CDM Project ...... 2-101

Chapters Project Effect 3.1 Energy Conservation Effect ...... 3-1 3.1.1 Technical grounds of Energy Conservation Effect ...... 3-1 3.1.2 Basehne for Calculation of Energy Conservation Effect ...... 3-4 (1) Setting of Baseline ...... 3-5 (2) Summary of Calculation ...... 3-6 3.1.3 Actual Energy Savings, Energy Saving Term and Cumulative Totals ...... 3-7 (1) Energy Conservation Effect ...... 3-7 (2) Summary of Calculation ...... 3-8 3.1.4 Verification of Actual energy Conservation Effect ...... 3-9 3.2 Greenhouse Gas Reduction Effect ...... 3-10 3.2.1 Technical grounds of Greenhouse Gases Reduction Effect ...... 3-10 3.2.2 Basehne for Calculation of Greenhouse Gases Reduction Effect”* 3-11 (1) Setting of Baseline ...... 3-11 (2) Summary of Calculation ...... 3-13 3.2.3 Actual Greenhouse Gases Reduction, Effective Term and Cumulative Reduction ...... 3-14 3.2.4 Verification of Actual Greenhouse Gases Reduction Effect (Monitoring) ...... 3-17 3.3 Effect on Production ...... 3-18 3.3.1 Fuel Reductions in furnace ...... 3-18 3.3.2 LPG Recovery ...... 3-18 3.3.3 Increase of fuel production via recovery of Off-gas (methane) * * 3-19

Chapter4 Profitability 4.1 Economic Effect for Return on Investment ...... 4-1 4.1.1 Prerequisite Conditions for Investment Return Effects ...... 4-1 (1) Initial Investment and Fund-Raising Methods ...... 4-1 (2) Post-Project Costs ...... 4-1 (3) Energy-Saving Effect ...... 4-2 (4) Other Economic Effects ...... 4-2 (5) Energy Prices ...... 4-2 (6) Others ...... -...... 4-3 4.1.2 Post-Project Economic Effects ...... 4-4 (1) Cost-Saving Effects by Reduced Consumption on Natural Gas ••• 4-4 (2) Increased-Income Effect by LPG Recovery ...... 4-4 (3) Project Profitability ...... 4-4 (4) Project Balance ...... 4-4 4.2 Cost Effectiveness Project ...... 4-10 4.2.1 Energy-Saving Effect ...... 4-10 (1) Annual Energy-Saving Effect to the Initial Investment ...... 4-10 (2) Cost-to-Energy-Saving Effect in the Entire Project ...... 4-10 4.2.2 Greenhouse Gas Reduction Effect ...... 4-10 (1) Annual Greenhouse Gas Reduction Effect to the Initial Investment ...... 4-10 (2) Cost to Greenhouse Gas Reduction Effect in the Entire Project ••• 4-10

Chapters Verification of Dissemination Effect 5.1 Possibility of the Technology Dissemination in Myanmar ...... 5-1 5.2 Total Effect Including Dissemination ...... 5-1 5.2.1 Energy Saving Effect ...... 5-1 5.2.2 Effect on Reduction of Greenhouse Gas Emissions ...... 5-2

Chapters Impact of the Project on Environment, Economy and Society 6.1 Environmental Impact ...... 6-1 6.2 Economic and Social Impact ...... 6-2

Conclusion

Reference Material 1. Site Survey Report 2. Reference List Summary

In December 1997, the Third Conference of the Parties to the United Nations Framework Convention on Climate Change (COP-3) was held in Kyoto and the Kyoto Protocol was adopted to prevent the progress of the global warming. The protocol defines the target that the industrialized counties should achieve at least 5% reduction of the greenhouse effect gases, such as C02, on average from 2008 to 2012 compared with the record in 1990. As for Japan, we are supposed to reduce the production by 6%.

In addition, the Kyoto Protocol resolved on the international remedies, such as “Jointed Implementation, JI,” to allow the industrialized countries to share the amount of the reduction of the greenhouse gases through the implementation of projects, and “Clean Development Mechanism, CDM,” between the industrialized countries and the developing countries. Japan as well as the other participants will fully exploit the system to achieve the target. We took a series of field surveys for energy saving and greenhouse gas reducing projects by installing modern refinery facilities into Thanlyin Refinery of Myanma Petrochemical Enterprises in Myanmar to apply to “CDM' in the future.

This small refinery located near Myanmar’s capital, Yangon, is a main refinery whose service covers the country’s southern area including Yangon. It is operated by Myanma Petrochemical Enterprise (MPE) under the Ministry of Energy. The nominal capacity for processing crude oil is 26,000 BPSD. The refinery consists of three crude oil distillation units and coker plant for increasing light oil production. Also it is equipped with its own off-site for storage, loading and unloading of crude oil and oil products, and utility supply facilities. Thanlyin Refinery was estabhshed before World War II. With modification, the oldest crude oil distillation unit (COD-A) has been working since the opening. Therefore, the aged equipment now shows severe deterioration not only in low energy efficiency, but also in the entire performance. Additionally, the other equipment that had been built from 1960 ’s to 80 s is more or less in decline. The common issue in this refinery is insufficient parts supply due to lack of funds and insufficient maintenance necessary to keep the performance. This insufficiency has been caused mainly by the priority to the production plan over the maintenance plan and results in another factor of the decline of performance. At the same time, due to few energy-saving-oriented facilities, the refinery inefficiently consumes fuel and thereby emits a large amount of C02. For those reasons, at the beginning of this series of surveys, we did not focus on any particular equipment but extracted items for improvement from a viewpoint of energy saving and greenhouse gas reduction. We then discussed business opportunities as CDM projects for each item. As a result, we proposed the selected items as follows:

1) Improvement in the heat recovery efficiency of Crude oil distillation unit 2) Improvement in the furnace efficiency of Crude oil distillation unit and Coker plant 3) Improvement in the efficiency of Power plant 4) Reduction of Steam loss 5) Modernization of the cooling water system 6) Recovery and reuse of Off-gas and LPG in Crude oil distillation unit 7) Modernization of Intermediate products run-down system

For each of the above project items derived from the site surveys, we made a concept design in Japan to examine energy saving effects, greenhouse gas reduction effects and expenses. The overall examination shows that the implementation of the projects can save energy of 25,844 toe/y or 46% of the fuel consumption set as the baseline, and reduce the emission of greenhouse effect gases of 57,457 t-C02/y, or 33% of the amount set as the baseline. (The detailed effects for each project are described in Section 3.) In particular, LPG recovered in the above project item 6) has high market value due to the large domestic (household) demand. This project will bring in good return, and moreover, can contribute to the improvement of the living standard in Myanmar with more fuel supply. The total expenses for all of the above items are estimated as 4,300 million yen. As for the funds, yen loans are expected to cover 3,800 million-yen and the Myanmar side will raise the remaining by the local currency. However, international low-interest loans, including any from Japan, have so far been suspended due to the political issues in Myanmar. Improvement in politics is expected in the future (for resuming yen loans). At present, the government of Myanmar does not show any clear policy to CDM, but recognizes the value of modernization, cost cut and productivity improvement by these projects. Thus, the government expresses its intention to start these projects as soon as the funds are raised. In order to carry out the project, they will immediately apply for a yen loan through the Japanese government. Chapter 1 General

This chapter describes the basic elements of this project, that is, Myanmar's political, economic, social and energy situation. Also dealt with are the project's importance, necessity results, and dissemination.

1.1 Internal Situation in Myanmar 1.1.1 Political, Economical and Social Situation The current situation in Myanmar is outlined in the following table.

Table 1.1-1 General situation in Myanmar Country name Union of Myanmar Area 677,000 km2 7 states (Shan, Kachin, Kayin, Chin, Rakhine, Mon, Kayah) Administrative 7 divisions (Bago, Yangon, Ayeyarwady, Tanintharyi, Sagaing, Magway, Divisions Mandalay) Below the state and division level, there are townships, cities or towns, wards, and villages.

Population 47.25 million (as per FY 1998/99) Ethnic groups (as per 1991 census) Burman (Myanmar) 64.2% Karen 9.1 % Shan 8.7 % Kachin 3.1 % Others 14.9 % The official language is Burmese (Myanmarese). Languages Minority ethnic groups have their own languages. Because of the country's former status as a British colony, English is understood widely. As to religions, 80 % of the population belong to the Theravada school of Ethnic groups Buddhism. and rehgions Besides Buddhists, there are followers of the Nat faith believing in 37 gods, animists amongethnic minorities, Christians and Muslims.

(Source) "ARC Report - Myanmar", World Economic Information Service (1999)

The modern history of Myanmar may be divided into the following three sections.

1) From January 1948 After Burma's independence, the anti-fascist People's Freedom League (Pasapara) came into power. But factors such as rebellions by the highland tribes, communist dominated groups, Mushms, and the Mon people, destabilized the

1-1 government.

2) From March 1962 A group within the army commanded by General Ne Win staged a coup d'etat by ousting the long troubled democratic government, and under a military government introduced a socialist planned economy (called "Burmese style socialism") in Burma. After this, Burma's economy remained stagnant for over 25 years.

3) From September 1988 Another military coup was staged in 1988 to suppress the widespread pro­ democracy movement among the people of Burma was staged, the State Law and Order Restoration Council (SLORC) was inaugurated under the leadership of General Saw Maung and seized power. At that time, the country's name was changed to Myanmar. Important political events that occurred in the years following are listed below.

• September 1988 National League for Democracy (NLD) founded • May 1990 General election held, NLD wins about 80 % of parliamentary seats • October 1991 Aung San Suu Kyi is awarded the Nobel prize for peace • April 1999 Than Shwe replaces Saw Maung as chairman of SLORC • End of 1995 Peace treaties are concluded with the main rebel groups • July 1999 Myanmar joins ASEAN as a regular member • November 1997 SLORC is reorganized, and the State Peace and Development Council (SPDC) is established

After 1998, the military regime has expanded its role from protector of law and order to champion of national development through setting up the SPDC, while its move to join ASEAN was guided by a desire to gain the country greater international recognition. In the meantime, the NLD's moves to step up criticism of the military regime and to appeal more strongly to the international community have intensified the political confrontation and led to a deadlock. This pattern of political confrontation has continued with little change visible. An article carried by Japan's Nihon Keizai Shinbun on January 10, 2001, to the effect that the start of talks between the Myanmar military regime and the NLD aimed at national

1-2 reconciliation was confirmed by a special UN envoy. Although the outlook for Myanmar remains uncertain, this is a positive development and raises hopes for reconciliation between the two side. The political system in Myanmar is summarized in Table 1.1-2 and its leadership system in Table 1.1-3.

Table 1.1-2 Political system in Myanmar Federal system. Since September 18, 1988, political power has been in the hands of the military which governs through the State Law and Order Form of Restoration Council (SLORC), reorganized into the State Peace and government Development Council (SPDC) in November 1997. In an effort to introduce a multi-party system, general elections were held in May 1990, but the military regime did not transfer power to the elected government. In January 1993, the National Constitution Giving Assembly charged with drafting a new constitution went into session and, as of October 1999 had completed roughly 60% of deliberations. The NLD has continued to boycott the National Constitution Giving Assembly since November 1995. Chief of state Senior General Than Shwe (SPDC Chairman since April 1992) The results of the May 1990 general elections were as follows:

National League for Democracy Parliament (NLD, led by Aung San Suu Kyi) 393 seats National Unity Party (NUP, former party in power) 10 seats Shan National League for Democracy (SNLD) 23 seats Others 57 seats Total number of seats 483 seats (Single-member electoral districts)

The military regime continues to ignore the results of this election. According to the election law, 492 members are elected to the unicameral People's Assembly to serve 4-year terms. The National Constitution Giving Assembly was convened in January 1993 and by September 1999 had completed roughly 60 % of deliberations, but failure to reach agreement on the right to autonomy of ethnic minorities, Constitution etc. has caused efforts to bog down. The military regime has been insisting on clearly spelling out the political role of the national armed forces in the constitution. This is being opposed by the representatives of the NLD and other political parties but other provisions, such as granting the commander in chief of the armed forces the right to declare a national state of emergency and reserving 25 % of seats in the People's Assembly for the military and military appointees, have been incorporated. (Source) "ARC Report - Myanmar", World Economic Information Service (1999)

1-3 Table 1.1-3 Leadership system in Myanmar Chairman : Than Shwe, Senior General (Commander in Chief of the Armed Forces) Members of the Vice Chairman : Maung Aye, General State Peace and (Vice-Commander in Chief, Commander in Chief of Development the Army) Council (SPDC) Secretary-1 : Khin Nyunt, Lieutenant General (Director, Directorate of Defence Services Intelligence; Chief, Office of Strategic Studies) Secretary-2 : Tin Oo, Lieutenant General (Chief of Staff of the Army) Secretary-3 : Win Myint, Lieutenant General Members : 14 others Prime Minister and Minister of Defence : Than Shwe, Senior General Deputy Prime Minister Maung Maung Khin, Vice Admiral Deputy Prime Minister Tin Tun, Vice Admiral Military cabinet Deputy Prime Minister and Ministei" of Military Affairs Tin Hla, Lieutenant General Minister of Electric Power Tin Htut, Major General Minister of Energy Lun Thin, Brigadier General Minister of Finance and Revenue U Khin Maung Thein Minister of Industry (1) U Aung Thaung Minister of Industry (2) Saw Lwin, Major General Minister of Mines Ohn Myint, Brigadier General Minister of National Planning and Economic Development : U Soe Tha Minister of Science and Technology U Thaung Minister in the Office of the Chairman of SPDC : Min Thein, Lieutenant General Abel, Brigadier General Maung Maung, Brigadier General 25 others (Note) As of September 1999 (Source) "ARC Report - Myanmar", World Economic Information Service (1999)

Myanmar's GDP in the 1998 fiscal year was $14.2 billion, and with a population of 47.3 million at that time, this works out to a per capita GDP of approx. $300 (Myanmar: Recent Economic Development (1999, IMF)). Looking at the GDP over the years, a large drop can be seen in 1988, the year of the pro-democracy riots. But from 1992 onward, after the military regime had introduced a number of changes such as switching to a market economy and opening the country to the outside world, as well as progress being made in establishing the legal and organizational infrastructure, the GDP has shown a high growth rate. In parallel, prices and the money supply have been rising

1-4 steeply (Table 1.1-4).

Table 1.1-4 Main economic indicators FY 1994 1995 1996 1997 1998* Economic growth rate (%) Real GDP 7.5 6.9 6.4 5.7 5.0 Fixed investment 23.5 28.2 22.8 8.0 9.8 Inflation rate (%, Yangon) Consumer prices (annual average) 22.4 21.8 20.0 33.9 49.1 Money supply (% change)

xviu±ie_y supply /M 9 34.0 39.1 28.7 27.6 Trade balance (millions of $) A497 A935 Al,064 Al,280 A 1,346 Exports 917 897 929 1,011 1,134 Imports Al,414 Al,832 A 1,993 A2,291 A2,480 Current account balance (millions of $) A86 A415 A500 A710 A603 Exchange rate (as of end of FY) Official exchange rate (kyats per 5.5 5.9 6.2 6.4 6.3 dollar) Market exchange rate (kyats per 105 125 165 243 345 dollar) * : Estimates (Source) Myanmar: Recent Economic Developments (1999, IMF)

This is due to the increase in general supply and demand accompanying stepped up economic activity and the fact that the former low-price structure is undergoing adjustment according to the market principle. It should, therefore, not be viewed in the same light as the kind of vicious inflation estimated from the numerical value of the rate of increase. However, as income and wages in some areas are not keeping pace with rising prices and disparities are widening, differences in the standard of living are becoming more conspicuous. This is exemplified by the corporate salaries given in the reference in Table 1.1-5.

1-5 Table 1.1-5 Average monthly wages paid by private enterprises (September 1999 survey) - Examples (Unit: Kyats (1 kyat = ¥ 0.3))

Foreign Office workers 6,000-10,000 affiliated manufacturers Factory workers 4,000-7,000

Foreign affiliated service Managers 50,000-70,000 companies (hotels) General employees 20,000-40,000 Domestic manufacturers Office workers 3,000-7,000 Construction companies Construction workers 5,000-8,000 (Note) Foreign affiliated companies sometimes pay in foreign exchange currency. (Source) "ARC Report - Myanmar", World Economic Information Service (Dec. 1999)

The composition of the GDP by industrial sector has not shown any marked change. Agriculture, the largest industry, accounts for more than one third of the GDP. Adding to this livestock, fisheries and forestry, the percentage share of the primary industries in 1998 was 42.7 %, making it the main force in Myanmar's economy. In comparison, the share of the manufacturing industry lingers at around 9 % (Table 1.1-6).

Table 1.1-6 Percentage share in GDP by industrial sector (Unit: %) FY 1992 1993 1994 1995 1996 1997 1998* Production 61.1 61.1 60.7 60.6 60.6 60.3 59.6 Agriculture 38.4 38.0 37.6 37.1 36.2 35.3 34.5 Livestock, 7.3 7.1 7.1 6.8 7.1 7.1 7.2 Fisheries Forestry 1.6 1.5 1.2 1.1 1.1 1.0 1.0 Mining 1.1 1.2 1.2 1.3 1.3 1.4 1.6 Manufacturing 8.9 9.2 9.2 9.3 9.1 9.1 9.2 Construction 2.9 3.1 3.4 4.0 4.7 4.8 4.9 Service 16.8 17.0 17.6 18.0 18.3 18.7 19.3 Transport 4.1 4.1 4.3 4.3 4.2 4.2 4.3 Finance 0.6 0.9 1.2 1.5 1.7 1.9 2.0 Commerce 22.1 21.9 21.7 21.4 21.1 21.0 21.1 * : Tentative (Source) Review of Financial, Economic and Social Conditions, Ministry of National Planning and Economic Development

1-6 Looking at the manufacturing industry by percentage share of individual industries, food and beverages account for 82 % of total industrial output in terms of value. In addition, many of the remaining industries are light industries or industries engaged in processing the products of the primary industry while the heavy industry and the machinery industry have not developed sufficiently at this point. This means that Myanmar's industry is still at the initial stage of development (Table 1.1-7).

Table 1.1-7 Manufacturing output by industrial sector (Unit: Millions of kyats) ---- FY 1997 Classification ~~~ % Share Food, beverages 405,542 82.1 Clothing 8,500 1.7 Construction materials 6,553 1.3 Personal effects 4,800 1.0 Household goods 995 0.2 Publishing, printing 871 0.2 Industrial raw materials 24,737 5.0 Mining and petroleum products 32,797 6.6 Agricultural machinery 2,362 0.5 Machinery, equipment 209 0.0 Transport machinery 2,869 0.6 Electric appliances 590 0.1 Sundry goods 3,050 0.6 Total 493,875 100.0 (Note) Figures are tentative. (Source) Review of Financial, Economic and Social Conditions, Ministry of National Planning and Economic Development

Some of the contributing factors are believed to be the destruction of much of the country's production facilities in the 1988 riots, the inability to meet a growing energy demand mainly in the form of electric power, and the absence of a sound industrial system due to the immaturity of related industries.

1.1.2 Energy situation Myanmar's primary energy consumption pattern is shown in Table 1.1-8. The country's main energy source is biomass which, in 1999, accounted for 64 % of total energy consumption. The next most important energy sources are oil and natural gas, with the share of oil growing rapidly in recent years. The extremely

1-7 small share of coal is characteristic of Myanmar.

Table 1.1-8 Breakdown of primary energy consumption in Myanmar (Unit: Thousands of BOB) FY 1990 1995 1996 1997 1998 1999 Energy % Share % Share Crude oil 5,645 7.9 11,137 11,971 13,769 16,535 20,599 22.3 Natural gas 5,587 7.8 8,961 9,716 10,498 10,119 9,567 10.4 Hydraulic power 3,503 4.9 4,480 4,553 4,904 2,661 2,692 2.9 Coal 137 0.2 151 145 99 212 461 0.5 Biomass 56,922 79.3 55,647 54,811 55,810 56,817 58,871 63.9 Total 71,794 100.0 80,376 81,196 85,080 86,344 92,190 100.0 'Source) "Myanmar EnergyData", Ministry of Energy (Dec. 2000)

An important characteristic of energy demand in Myanmar is that oil and natural gas have been extracted since way back in the country's history. Crude oil production topped 10 million barrels in 1979 and 11.2 million barrels in 1984, but after this went into decline. In recent years, while not declining further, production tends to move sideways, remaining at 3.5 million barrels in 1999. In comparison, the domestic demand for petroleum products is rising. Also, the imports of crude oil, gasoline with its especially high demand, and kerosene have increased markedly in recent years (Tables 1.1-9 and 1.1-10).

Table 1.1-9 Crude oil production and refining (Unit: Thousands of barrels) FY 1990 1995 1996 1997 1998 1999 Production 5,312 4,277 3,787 3,632 3,378 3,480 Imports 774 3,552 2,703 4,794 5,077 5,003 Exports — — — — — — Refining 5,175 6,903 5,605 7,664 7,626 7,732 (Source) "Myanmar Energy Data", Ministry of Energy (Dec. 2000)

1-8 Table 1.1-10 Supply of main petroleum products (Unit: Thousands of British gallons) FY 1990 1995 1996 1997 1998 1999 Item Production 41,568 65,133 53,204 77,738 81,802 82,005 Gasoline Imports - 914 9,630 1,103 11,922 13,081 Total 41,568 66,047 62,834 78,841 93,724 95,086 Production 8,204 17,524 14,381 15,725 14,055 16,162 Jet fuel Imports — — 1,954 — — — Total 8,204 17,524 16,335 15,725 14,055 16,162 Production 602 235 282 237 41 38 Kerosene Imports — — — — — — Total 602 235 282 237 41 38 Production 84,616 116,564 91,451 123,097 119,147 116,128 Gas oil Imports 6,905 62,232 93,590 89,739 130,957 189,143 Total 91,521 178,796 185,041 212,836 250,104 305,271 Production 28,664 27,429 24,476 25,743 25,147 16,941 Fuel oil Imports — — 1,014 — — — Total 28,664 27,429 25,490 25,743 25,147 16,941 (Source) "Myanmar Energy Data", Ministry of Energy (Dec. 2000)

Onshore extraction of natural gas until recently had shown steady growth, but for the last few years has been hovering around 60 billion cubic feet (Table 1.1-11). But with the discovery of a series of offshore natural gas deposits, the country has started supplying natural gas to Thailand by pipeline and expects to supply the domestic market as well.

Table 1.1-11 Natural gas production and consumption (Unit: MMCF) FY 1990 1995 1996 1997 1998 1999 Item ~~~ ------Production (Onshore) 33,645 54,025 58,580 63,505 60,898 57,869 Production (Offshore) — — — — 59,085 161,530 Exports — — — — 59,085 161,530 Consumption 33,513 53758 58,285 62,977 60,702 57,389 Raw material 6,833 7,417 6,074 7,698 7,952 8,226 Industrial use 5,059 8,469 9,238 10,284 8,675 8,926 Power generation 19,134 35,204 40,082 42,046 41,430 37,610 In-house consumption 2,384 2,524 2,725 2,769 2,496 2,488 Other 103 144 166 180 149 139 (Source) "Myanmar Energy Data", Ministry of Energy (Dec. 2000)

In charge of the process from production to distribution of oil and natural gas are

1-9 the following three state enterprises subordinated to the Ministry of Energy.

1) Myanma Oil & Gas Enterprise (MOGE) In charge of surveying, development, production and transport of oil and natural gas.

2) Myanma Petrochemical Enterprise (MPE) In charge of the 3 domestic oil refineries, as well as operation of LPG facilities, methanol plants, and ammonia and urea fertilizer plants, and production of petroleum and petrochemical products.

3) Myanma Petroleum Products Enterprise (MPPE) In charge of distribution of petroleum products to the market

Electric power in Myanmar is generated mainly from natural gas and hydraulic power. Total power generating capacity in 1999 stood at 1173 MW, breaking down into 361 MW generated with hydraulic power and 530 MW generated with natural gas driven turbines. The equivalent figures for 1990 and 1995 of 804 MW and 982 MW, respectively, indicate that power-generating capacity is increasing steadily. Considering further that probably only about 1 % of Myanmar's water power resources have been tapped at present and that the production of natural gas is expected to increase as mentioned above, Myanmar's power generating potential is large indeed. Electric power generation as well is rising in proportion to the increase in total power generating capacity, despite a temporary drop in the hydraulic power sector due to the 1998 drought. For the past four years, 4000 to 4500 GWh were generated, which is an increase of more than 50 % over 1990. Tables 1.1-12 and 1.1-13, respectively, show the progression of Myanmar's electric power generating capacity and electric power generation.

1-10 Table 1.1-12 Electric power generating capacity (Unit: MW)

FY 1990 1995 1996 1997 1998 1999 % Energy source^^^^ Share Hydraulic power 258 317 329 328 341 361 30.8 Geothermal energy 92 61 96 96 96 216 18.4 Gas turbines 357 523 523 530 530 530 45.2 Diesel 97 81 83 82 65 66 5.6 Total 804 982 1,031 1,036 1,032 1,173 100.0 (Source) "Myanmar Energy Data", Ministry of Energy (Dec. 2000)

Table 1.1-13 Electric power generation (Unit: GWh)

1990 1995 1996 1997 1998 1999 % Energy source Share Hydrauhc power 1,248 1,596 1,622 1,747 948 959 21.3 Geothermal energy 28 63 59 212 225 653 14.5 Gas turbines 1,293 2,061 2,409 2,543 2,922 2,840 63.0 Diesel 74 43 40 48 44 56 1.2 Total 2,643 3,763 4,130 4,550 4,139 4,508 100.0 (Source) "Myanmar Energy Data", Ministry of Energy (Dec. 2000)

At present, however, the country is facing chronic and absolute energy (oil, electricity, etc.) supply shortages while the energy demand is rising in the wake of accelerated economic development in recent years. In addition, shortages in the supply of kerosene for household use have made many people resort to electric heating appliances, which in turn has driven up the electricity demand of households. As a result, gasoline and kerosene prices are soaring (Table 1.1-14). In August 1999, electricity charges were revised to nearly double the previous level. Because the electricity supply cannot keep pace with demand, there are even scheduled power cuts in urban areas.

1-11 Table 1.1-14 Changes in the price of petroleum products (Unit: Kyats/Imperial gallon) FY 1983 1988 1994 1997 Gasoline 3.50 16.00 25.00 180.00 Kerosene 2.50 13.50 15.00 15.00 Gas oil 2.50 10.50 20.00 160.00 Fuel oil 1.90 8.50 12.00 12.00 (Note) MPPE sales prices (Source) "Myanmar Energy Data", Ministry of Energy (Dec. 2000)

Some of the factors contributing to this situation are an inability to import enough energy resources due to a shortage of foreign currency deteriorated of the existing energy equipment in power plants, refineries, and other facilities, as well as excessive transmission losses in the case of electric power.

Table 1.1-15 shows a comparison of primary energy supplies in the countries of Southeast Asia. The per capita energy supply in Myanmar is only about half that of Indonesia or 60 % that of the Philippines, placing the country at the very bottom of the countries included in the table. This is another indication that Myanmar's economy is still in the initial developing stage compared with other countries in the area and that the country's energy supply is insufficient.

Table 1.1-15 Primary energy supply in Southeast Asian countries Per capita primary Primary energy supply Population energy supply (M toe) (millions) (toe/capita) Myanmar 13.63 44.5 0.31 Brunei 2.08 0.3 6.61 Indonesia 123.07 203.7 0.60 Malaysia 43.62 22.2 1.97 Philippines 38.31 75.2 0.51 Singapore 24.30 3.2 7.68 Thailand 68.97 61.2 1.13 Vietnam 33.69 76.5 0.44 (Note) 1998 figures (Source) "Energy Balances of Non-OECD Countries 1997-1998", IEA

1.1.3 Necessity for a Clean Development Mechanism (CDM) Project The share of the secondary industry in Myanmar's GDP is small, and at the same time, the country's severely limited energy supply has kept the per capita energy consumption at a low level.

1-12 This state of affairs may be attributed to a number of factors, including the destruction of a large portion of production equipment during the 1988 riots, the suspension of ODA by the industrialized nations critical of the military regime, and lack of growth in foreign investment due to the Asian economic crisis, etc., leaving the country with insufficient foreign currency income to import energy resources, machinery and equipment. For this reason, most of the few existing industrial facilities are out-of-date, in a poor state of repair and lacking necessary spare parts. The country thus is caught in a vicious cycle where energy, scarce as it is, is used in an inefficient manner. Meanwhile, the government of Myanmar aims at economic development through industrialization. It is fully aware of the need for making production equipment more efficient by repairing existing equipment and introducing energy saving equipment in order to produce industrial materials at lower cost. At the same time, the government is keenly aware of environmental needs. This is backed up by reports that the government is now in the process of settingup an Environment Ministry and that this ministry is to be positioned high up in the ranks of ministries. Up to now, the government of Myanmar has not expressed its intentions with regard to implementing the new energy conservation project by applying the CDM system. This is partly due to the fact that a final decision on the CDM system was not reached among the participants of COP6 which took place in Hague in November 2000, but the main reason is that the government is not yet in a position where it is able to decide on a policy concerning the CDM system. However, considering the situation of this capital starved country implementing a CDM project would be a very attractive proposition indeed as the changeover to energy saving equipment and modernization of production facilities would bring with it the introduction of technology and capital from the industrialized nations. Also, assurances have been received from the Ministry of Energy that they are willing to cooperate in obtaining necessary domestic approvals, etc. for implementing the target project as a CDM project and are positively disposed toward the project.

1-13 1.2 Necessity for Introduction of the Energy Saving Technology in the Target Industry

Spurred by the first oil shock in 1973, the Japanese oil refining industry has been taking energetic measures for more than twenty years to reduce energy consumption and has much to show for its efforts. The technological standard of Myanmar's refineries corresponds roughly to the Japanese standard in the 1950s. While the number of secondary refining facilities (desulfurization, reforming, cracking, etc.) with their relatively high energy consumption is few, those that do exist are lacking even the most basic forms of energy saving technology. Expressed in figures, the fuel consumption of Myanmar's crude oil distillation units, their main refining equipment, in terms of refined crude oil is 1.6 - 2.3 vol%, which is very high when compared with the average fuel consumption in Japan (e.g., Cosmo Oil Co.,Ltd : 0.9 - 1.1 vol%). Therefore, taking the fruits of the Japanese oil refining industry's energy conservation efforts accumulated over the past decades and putting them to work in Myanmar has a highpossibihty of success. And for Japan to participate in the spread of energy conservation in the oil refining industry one of the main energy- intensive industries in the developing countries, is extremely significant in meeting the needs of the times and can be expected to bear well in the years to come. As Myanmar currently lacks sufficient refining capacity to meet domestic demand, it is trying to fill the gap by importing petroleum products as far as domestic capital resources permit. For the future, however, a master plan has been set up which provides for the expansion and modernization of refineries and the installation of new equipment in order to enable the country to import low-priced crude oil from the Middle East and turn it into petroleum products in its own domestic refineries. Unfortunately, though, this master plan does not sufficiently address the concerns of energy saving technology. Therefore, addressing these needs in future planning by implementing energy conservation and modernization project at an early stage would have a decisive impact on reducing energy consumption and emission of greenhouse gases. In this sense, promoting energy conservation in Myanmar's refineries is of the greatest necessity.

1-14 1.3 Significance, Necessity and Dissemination Effect on Related Industries

In Myanmar, where most manufacturing enterprises belong to the light industry, the industries that reach a level where they can be termed energy-intensive are the oil refining and cement industries. The choice for this project fell on the oil refining industry because it has a long history in Myanmar, for it has domestic oil fields, and the target site, Thanlyin Refinery, is an old refinery established prior to World War II. Although Myanmar is included among the oil-producing countries, crude oil development peaked at 11.2 million barrels in 1984 and then went into decline. In 1999, the figure stood at 3.5 million barrels, which barely covers one-sixth of the country's domestic consumption. This is supplemented with crude oil imports mainly from Malaysia, which are refined at the Thanlyin Refinery for supply to domestic users. The country is compelled to use its scarce foreign currency resources to import high-priced petroleum products, but the quantities imported are not nearly enough to meet demand. Because of the under-supply of petroleum products, the per capita consumption of petroleum products in Myanmar remains extremely low (less than half that of Vietnam, 1/20 that of Thailand, and 1/60 that of Japan), and the resulting extreme fuel and electric power shortages clearly impede improvements in the country's standard of hving and healthy economic development. To cope with these problems, Myanmar strongly desires to update and expand the Thanlyin Refinery, as it is the core facility for supplying the country with petroleum products. To this end, a master plan for Myanmar's refinery industry as a whole, also providingfor Modernization of Thanlyin Refinery was prepared in 1998 by Nichimen and Cosmo Engineering in cooperation with the Ministry of Energy in Myanmar. The purpose of the present survey is to carry out a feasibility study on step-by-step updating of the Thanlyin Refinery based on this master plan. The foremost objective, especially in the first stage, will be to achieve energy savings by restoring and updating existing equipment and concurrently with contributing to a reduction in greenhouse gas emissions, raise the operating efficiency of existing equipment. At the same time, the project promises to contribute decisively to accelerating the spread of energy saving technologywithin the industry and beyond.

1-15 Site Size (BPSD) Location Thanlyin Refinery 26,000 South of Yangon Thanbayagan Refinery 25.000 Central inland area Chauk 6.000 Central inland area

Myanmar operates the above three refineries, including the Thanlyin Refinery. All of these are simplified refineries using mainly crude oil distillation units, and the modernity of their equipment and degree of energy conservation is similar, which should make it easy to take a horizontal approach to developing the energy saving technology to be proposed through this study. At the same time, all three refineries are oparated by Myanma Petrochemical Enterprise (MPE) which is subordinate to the Ministry of Energy, so if the project is implemented at the Thanlyin Refinery and receives a positive evaluation, the government is expected to fully back up any activities designed to further dissemination of energy saving technologies. The project can therefore be said to have high potential as well with regard to creating a dissemination effect.

1-16 Chapter 2 Concretization of the Project

This section describes the overview of this project area, the contents of this project, the overview of the site, the specifications of the remodeled facilities and fundraising plans to embody project plans.

2.1 Project Planning 2.1.1 Overview of the Project Area Union of Myanmar is a long country north and south, located in between 28° SON and 9° SON. The total area is about 680,000 km2, twice as large as that of Malaysia. Myanmar is bounded by the five countries, Bangladesh, India, China, Laos and Thailand, on the northwest to the south, and touches the Andaman Sea on the Bay of Bengal on the west and the Gulf of Martaban Bay and the Andaman Sea on the south. The Westside of the country has a long coastline, but does not have any good port because of the shallow water. In terms of the weather, Myanmar has a large rainfall throughout the year. In the Northwest, which borders on Bangladesh, a rainfall between May and October reaches 5,000 mm by cyclones. The Irrawaddi River traveling from the north to the southern coast through the central Mandalay area has been used as the most important mean of transportation. The Irrawaddi River branches to a lot of arms and forms a large delta area. The capital, Yangon, is located on the east end of the Mouths of the Irrawaddi. The project site is Thanlyin Refinery in the Thanlyin area (former Siriam) outside the capital, Yangon (former Rangoon). The area of the site is about 5 million m2. Figure 2,2-1 shows a cover shot of the refinery in the next page and Figure 2.1-2 and 2.2-3 show the maps of the surroundings. The Thanlyin area is in the tropical zone with a large rainfall. The climate is mild as temperatures are relatively constant throughout the year, 25°C or less in winter and 30°C or less in summer. On the other hand, the rainfall in the monsoon between May and October reaches 2,500 mm compared with the almost rainless months of December and January. Table 2.2-1 shows the climate data.

2-1 Table 2.2-1 Average temperature and rainfall in Yangon (average, 1988 through 1997) JAN. FEB. MAR. APR. MAY JUNE Temperature (°C) 24.9 26.5 29.0 30.5 29.4 27.4 Precipitation (mm) 0 10 14 17 234 583

JULY AUG. SEP. OCT. NOV. DEC. Temperature (°C) 26.9 26.6 27.1 27.6 27.0 25.0 Precipitation (mm) 611 609 361 179 48 2 (Source) Myanmar Central Statistics Agent, Statistical Yearbook, 1998

Thanlyin Refinery is located about 15 km east of the capital Yangon by road (or 6 km in the line of the crow) on the other side of the Pegu River as shown in Fig. 2.1-2. The location is so important for land and water transportation that Thanlyin has been the busy commercial port using the Irrawaddi River upstream to the country’s central area and the Yangon River by water downstream to the Gulf of Martaban and also the only port that can directly trade with foreign countries. In Myanmar, in addition to Thanlyin Refinery, Chauk Refinery with 6,000 BPSD was constructed in 1954 to process the domestic crude oil in the central area. However, Chauk Refinery gets too aged. Also in the Man area, a refinery with 25,000 BPSD was constructed in 1982 with help of Japan. Since the domestic crude oil tends to dry up, the refinery cannot operate over its 30 % capacity. On the other hand, Thanlyin Refinery, though with 26,000 BPSD, becomes the most important energy supplier in the capital area and Union of Myanmar because it

produces more than 50 % of the petroleum product for domestic use from imported crude oil using the advantage of its location.

2-2 2-3 2-4 ( &-; 1 %;-f'" * } |\ S, i* Fig. 2.1.3 Maps of the surroundings of the site (2) X " !'X-

$ . i - & ^ >; <$ z- $ %’■, . > -> ix.* ..-- - \ x...... •* f

2-5 2.1.2 Contents of the Project (1) Facilities to be Improved The major equipment studied in this project is as follows:

a) COD-B b) COD-C c) Coker Plant d) Power generation boiler e) Steam turbine power generator f) Steam system g) Cooling water system h) Off-gas facihty i) Intermediate product run-down system

(2) Basic Contents of this Project We plan the improvement work for the equipment mentioned above are planned, such as the improvement of the efficiency of furnace, heat exchanger, boiler and power generator, the prevention of steam loss and off-gas, and the stabilization of cooling water, to save energy and reduce greenhouse gases. Also, each target such as expenses and energy saving expectations are examined because this project will consist of multiple work subjects. The technical concepts applied in this project is as follows:

1) Modification or replacement of the furnace (including the combustion equipment of the boiler) Modification or replacement of the present aged furnace with low heat efficiency are planned to save energy and thus to contribute to C02 reduction.

2) Replacement of heat exchangers and prevention of fouling Replacement of the present aged heat exchangers with low heat efficiency is planned to improve the heat recovery and the efficiency of remaining heat of crude oil. This is not only to save energy in the furnace and to contribute to C02 reduction, but also to minimize the decrease of heat efficiency by fouling and thus to extend the project effects.

2-6 3) Replacement of the power plant Replacement of the aged steam turbine power generation system with low heat efficiency is planned to save energy and to contribute to C02 reduction.

4) Countermeasures againststeam loss (prevention of leakage) Taking countermeasures against steam loss in the aged steam system, especially in the end piping and accessories, is planned to reduce the load of the boilers, to save energy and thus to contribute to C02 reduction.

5) Replacement of the coolingwater system The existing cooling water system is out of date and with low efficiency. Poor performance of this equipment is a factor of preventing the refinery from working stably. Replacement this equipment can remove the negative factor and lead to stable operation of the refinery after the modernization project for energy saving. This update can indeed assure the project effects.

6) Countermeasures against off-gas leakage (recovery and reuse of off-gas) Recovering off-gas emitted into the atmosphere without recycling at present and burning recovered gas (light hydrocarbons) in the furnace are planned to convert methane in the off-gas into C02 with relatively low greenhouse effect and thus to reduce the exhaust of greenhouse gases. The LPG recovered at the same time has a high product value. Indeed, the component can economically contribute to this project.

7) Countermeasures against product loss (prevention of vaporization loss of light oil) Suspending the use of the existing intermediate product tanks with poor sealing and modernization the product run-down system from the refining units to the tanks are planned to reduce the vaporization loss of light oil (especially, gasoline). This subject is an effective measure against air pollution by hydrocarbon vapor.

2.1.3 Greenhouse Gases and Other targeted Gases The greenhouse gases to be studied in this project are carbon dioxide and methane. The furnaces in the crude oil distillation unit and the coker plant produce such gases. In addition, the boilers in the power plant of Thanlyin Refinery produce a lot of carbon dioxide. Fuel oil and fuel gas (partly natural gas) are used in the furnaces and the boilers

2-7 as fuel. Both fuels consist of carbon and hydrogen so that carbon dioxide is produced in the oxidation process of carbon. On the other hand, Thanlyin Refinery processes high-quality crude oil containing little sulfur so that negligible sulfur oxides are produced in the oxidation process.

2.2 Overview of the Project Site (Myanma Petrochemical Enterprise) 2.2.1 Interests of the MPE This enterprise responsible for this project on the Myanmar side is Myanmar Petrochemical Enterprise (MPE; affiliated with Energy Planning Department) and Thanlyin Refinery owned by MPE is entrusted with the implementation and control. In Myanmar, the demand of oil products has been increasing year by year. Therefore, Thanlyin Refinery that has the largest refinery in the country takes a larger part of the production. Since the production of the domestic crude oil decreases, the refinery imports crude oil as described Chapter 1. However, the oil import decreases the insufficient foreign currency reserve and thus makes the national finances worse. In addition, all the equipment of the refinery is very old and has large energy loss due to its poor design for efficiency. Therefore, the energy saving by the implementation of this project and the efficient operation by the cost cut in production are so important and urgent tasks for Energy Planning Department and MPE that MPE takes a great interest in this project. Moreover, MPE is environmentally aware and highly evaluates the greenhouse gas reduction by the implementation of this project. Their interest to this project is very high concerning the above background. The reason is summarized as follows: •

• An energy-saving project is the most important task for MPE to reduce the consumption of crude oil at refineries. • The government of Myanmar (Energy Planning Department) and MPE clearly state that they will cooperate with us if this project is assisted by the Japanese government. • The government of Myanmar and MPE made a strong request to us to conduct this survey.

2-8 2.2.2 Conditions of the Related Facilities (Overview, Specifications and Operation Conditions) of this Project Site (MPE) MPE denotes Myanma Petrochemical Enterprise, which is only governmental refiner in Myanmar. MPE have three refineries in the country: Thanbayakan, Chauk and Thanlyin. The refinery we discuss here is Thanlyin Refinery near the capital, Yangon. Thanbayakan and Chauk refineries located in the central Myanmar process each local crude oil. However, the domestic crude oil has not been developed satisfactorily. The operation has thus been going slowly at a rate of around 30 - 40% to the full capacity. Table 2.2-1 shows the nominal processing capacity of refineries in Myanmar.

Table 2.2-1 Nominal processing capacity of refineries in Myanmar Designcapacity Location Crude oil (BPSD) Thanlyin 26,000 Near the capital Yangon Imported

Thanbayakan 25,000 Central area Domestic

Chauk 6,000 Central area Domestic

Total 57,000

(1) Overview of the Facilities at MPE Thanlyin Refinery Thanlyin Refinery was opened in 1920 ’s, the British colonial era. It reopened at the site of a main facility that UK had removed in 1948 to withdraw there. At the refinery, an old type boiler made in 1925 still works. In fact, such long-term operation amazed us. The refining facilities are crude oil distillation unit (COD- A, B and C), vacuum distillation unit, a coker plant and a lubricant blender. Those were installed in 1957 or later. The oil refining is much simpler than its Japanese counterpart. They seem to make efforts to keep operating the old refining, off-site and utility facilities with some necessary maintenance.

1) Crude oil Almost all the crude oil processed at Thanlyin Refinery is Tapis Blend Crude from Malaysia. Two 6,000-DWT-class shuttle tankers transport the crude oil from 70,000-DWT-class tankers staying 100 km off the seashore to the jetty along the PeguRiver. The crude oil is then sent to the oil tanks in the refinery. One cycle

2-9 of the operation takes about 40 hours. Crude oil is unloaded about once a day. One of the issues on operation stability is poor transportation due to bad weather in the monsoon. This poor transportation occasionally affects the production. The Tapis Blend Crude appropriately meets the Myanmar’s market where heavy industries have not so developed, which results in a low demand of heavy oil, and on the other hand, automobile fuel is so popular that gasoline and gas oil are demanded. Table 2.2-2 shows the yield of Tapis Blend Crude used at Thanlyin Refinery. The major characteristics are very high yields of motor spirit, aviation turbine fuel and kerosene, and gas oil as automobile fuels. The average value of these three kinds is 75 to 80 %.

At Thanlyin Refinery residue oil from COD is used as feed stock for the coker plant. Thus, residue oil from COD is an important resource for gasoline and gas oil. On the other hand, a lot of refining loss are observed due to little recovery of LPG. This recovery is one of the major purposes of this project.

Table 2.2-2 Yield of Tapis Blend Crude oil at Thanlyin Refinery Yield (%) Note Thanlyin Typical example in Refinery Japan Refining loss 1.0-2.0 0.1 Large loss in uncollected LPG LPG 0-0.4 2.1 Naphtha (Motor Spirit) 27.2-34.2 19.4 Used as gasoline

Aviation turbine fuel • 18.1-26.9 23.1 Kerosene Gas oil 22.9-31.0 27.7 Residue oil 18.3-24.9 27.6 Coker feed stock

2) Refining System As mentioned above, Thanlyin Refinery simply consists of crude oil distillation unit, vacuum distillation unit, coker plant and lubricant blender. COD-A started its operation in 1957. In fact, it has been used for more than 40 years. The aged equipment was under inspection when we visited there. However, the operation plan after the inspection was not clear. COD-B is the main unit among the three crude oil distillation units and started its operation in 1962. In 1998, Cosmo Engineering Co.,Ltd. installed the pre-flash tower and stabilizer.

2-10 The coker plant was constructed by Mitsubishi Heavy Industries Ltd. (MHI) in 1986. The equipment is important for the refinery to produce automobile fuel. Table 2.2-3 shows the capacity of the refinery facilities at Thanlyin Refinery.

Table 2.2-3 Refinery facility fist at Thanlyin Refinery Equipment name Design Maximum Minimum Commission­ Note Capacity Throughput Throughput ing (BPSD) (BPSD) (BPSD) Crude oil distillation unit COD-A 6,000 6,000 3,600 1957 Foster Wheeler COD-B 14,000 12,880 9,940 1963 Foster Wheeler COD-C 6,000 6,000 2,040 1980 MHI Vacuum distillation 2,000 2,000 1957 Foster Wheeler unit Coker plant 5,200 5,200 2,600 1986 MHI Lubricant Blender 25,000 25,000 1873 I CPA* *ICPA International Co-operative Petroleum Association (Source) Thanlyin Refinery ; October 17, 2000

3) Off-site facilities a) Crude oil tanks The crude oil tanks have a capacity of 122,742 kl (27 Million.Gal) as of October 2000. With a daily processing volume of 17,000 BPSD (2,700 kl/D), the capacity could be equivalent to a stock of about 45 days. This figure is smaller than 61 days in Japanese refining at the end of the fiscal 1995. Therefore, it seems that Thanlyin Refinery has struggled to manage on crude oil, taking into account bad weather which may continue for several days in the monsoon. In Thanlyin Refinery a new crude oil tank of a volume of about 21,000 kl is under construction for stable supply. The construction will be completed in March 2001.

b)LPG tanks The current LPG tanks have a capacity of 11,000 m3 as of October 2000, as shown in Table 2.2-8. Crude oil distillation unit and coker plant produce LPG. This LPG is separated to C3 and C4 in the gas section attached to the coker and then is shipped as a final product.

c) Product tanks The product tanks have a capacity of 146,000 kl (32.2 Million Gal). Gasoline (38,000 kl) and gas oil (88,000 kl) take the most part. Many of the tanks started

2-11 their operation from 1943 to 1960 ’s. Many tanks are considerably deteriorated. With a daily processing volume of 2,700 kl/D (17,000 BPSD) again, the capacity of the products could be equivalent to a stock of about 54 days. This figure is smaller than 68 days (45.12 Million kl) in Japanese refining at the end of the fiscal 1995.

d) Jetty All the jetty face the mouth of Bago River with shallow water close in shore. The maximum width of the draft is 9 m. The width of the river limits the boat route to about 500 m range at a maximum. For example, it is hard to turn around there. In addition, the tide is as large as 7 m. Therefore, such a change in water level limits loading and unloading, especially of crude oil with a large lot.

e) Utility facilities Table 2.2-4 shows the utility facilities at the refinery.

Table 2.2-4 Utility facilities Power Generation Net Manufacturer Commission­ Note generator power performance ing kW kW Main 6,000 3,750 MHI 1980 Non-stop operation^ 3,300V 50Hz Sub 2,000 Metropolitan 1925 Stand-by Sub 2,000 Metropolitan 1925 Under repair

Boiler Capacity Steam Steam Manufacturer Commission­ Note pressure temperature ing ton/h Kg/cm2 °C Power 60 42 420 MHI 1980 Non-stop generation operation Use Processing 10 15 340 YARROW 1925 Stand-by Use 10 15 340 YARROW 1925 Stand-by 10 15 340 YARROW 1925 10 15 340 YARROW 1925

2-12 Water Water Type Capacity Manufacturer Commission­ Pure power tank purification Source ing m3 facility ton/h Pond water 2B-3T 35 MHI 1980 400

Plant air Type Capacity Number Air feed Manufacturer Commission­ facility of pressure ing facilities kg/cm2 Nm3/h Demand Reciprocating 760 3 5.6 BELLIO& 1946 l,360Nm3/h MORROKO

Instrument Type Capacity Number Air feed Manufacturer Commission­ air facility of facilities pressure ing Nm3/h kg/cm2 Demand Reciprocating 470 2 7.1 JOY 1980 470Nm3/h 1,000 Screw 1,000 1 8.0 HOKUETSU 1998 Nm3/h

Dryer Type Capacity Manufacturer Commissioning Note Nm3/h Absorption and 470 SHIRAKAWA 1980 regeneration Chiller 1,000 HOKUETSU 1998

Cooling Type Capacity Temperature (°C) Note water Ton/h Return Supply AT Spray cooling 2,300 45-50 30-35 15 The number of cooling water pumps is 11.

Industrial Water source Volume of pond Note water m3 Pond water 413,545 River water contains fine sand, so it is not applicable.

(2) Operation Conditions at Thanlyin Refinery (MPE) l)Oil refining flow The entire oil refining flow is shown in Fig 2.2-2 in the next page. As mentioned earlier, the main equipment consists of the three crude oil distillation unit (COD-A: 6,000 BPSD, COD-B: 14,000 BPSD and COD-C: 6,000 BPSD) and the coker plant. Each COD is operated to maintain overall product yield at desired value. Residue oil from COD is used partly as fuel at the refinery

2-13 and largely as material of the coker (5,200 BPSD). Thus, the production planning is made to maximize the production of LPG, coker naphtha, coker gas oil and coke. Straight-run naphtha from COD and coker naphtha are blended to produce gasoline. The research octane number (RON) is estimated as about 70. However, the gasoline is shipped as a product. The most kerosene is shipped as aviation turbine fuel(ATF) and the very small part is for oil lamp use. Gas oil distilled in the crude oil distillation unit (COD-A, -B and -C) and kerosene distilled in COD-B and -C are blended to produce gas oil as automobile fuel. The cetane index is constantly more than 60 due to the use of high quahty Tapis Blend Crude oil. Fuel oil for shipment is coker gas oil that is produced by coker plant using the residue oil from COD. The portion of the fuel oil production to the total is as low as 8 - 9 %. The demand of fuel oil is low. On the other hand, the high demand of gas oil for automobile fuel will continue. Therefore, the processing of the coker gas oil to produce the motor fuel by hydrogeneration can be an excellent project in the future.

2-14 THANLYIN REFINERY PRODUCTION BALANCE (COD-A+B+C Operation Case)

Crude 143,300 kl LOSS 0.020. 84 LPG(11.000m3) PP 201 (FR) kl MS 0.321 C4+ 0.58w% 9,100 COD 1,348 C3 S Iwppm 70.0% (A) 4.200 * LK 0.18L 243 w 202(FR) kl 6,000 760 1,722 BB 9.100 BPSD MK 0 C3- 0.83w% ------0 * FO(CGO) C4 TS 10wppm 1 96 GO 0.229^ 203(FR) kl 962 9,100 LOSS 0.010 Motor Spirit(38.000kl) 112 B71(FR) B83(FR) B81(FR) TO 0.249 LPG 0.004 1.800k! 9,100k! 4.500kl MS 204(CR) kl 1,046 45 7,984 RON 69 0.342 S 0.001w% TapisBIend 9.100 MS ------► D 0.7976 COD 3,830 B91(FR) B92(FR) B111(FR) Dist 46/183 PP 12 80.0% (B) LK 0.269 t 4.500kl 9.100kl 4.500kl Col P.Yellow S 0.02 205(FR) kl 11.200 f 3,013 Vis 2.153 9.100 14,000 MK RON92 (40°C) FO(CGO) BPSD Import ^ B82(FR) w 197 GO 0.192 4,500kl 206(FR) kl 2,150 CRUDE 9.100 21,400 TC 0.183 ATF(4,500kl) ATF 2,050 LOSS 0.015 B74(FR) S 0.01 w% 207(CR) kl 90 1,152 4.500kl FP -55 LPG 0 SP 23mm 9.100 -----w 0 Ar. 16v% COD MS 0.272 209(FR) kl 100.0% (C) 1,632 HSD(77,200kl) HSD LK 0.192 B75(FR) B77(CR) B84(FR) Cl 61.4 27.300 6.000 ------► 6,000 1,152 9.100kl 9.100kl 9.1 00k! PP 9(°C) BPSD LGO 0.227 r Diesel FP 67 CO 211(FR) kl FO(TC) 1,362 Blend Dist 190/344 27,300 99 8,745 B10KFR) B102(CR) B113(CR) Vis 3.1(40°C) HCGO 0.083 4.500kl 9,100k! 9.100kl S 0.1 w%

128(FR) kl TC 0.212 4.500 B114(CR) B115(FR) 601 (CR) 9.100k! 9.1 00k! 4.500kl Coker Gas 0.0775 Jnewcfr)" "l LPG 334 l___ 23500J TC Total 45 LPG 0.046 B121ACCR) :NEW(FR) (2001/3) 4,367 243 4,500kl ■30jqookiie 82.9% 0.272 "(2000/12) Blance Check 4,313 1,173 CGO(15,010k) 5,200 CGO 0.504 B112(CR) B122B(CR 406(CR) BPD % KL/D IGPD T.KL/Y wk. Loss 286 1.3 45 10,003 15.7 BPSD 2,174 2,023 9.1 00k! 1 ______1.800kl COKE LPG 243 1.1 39 8,506 13.3 FG(CG) HCGO 0.040 S 0.2w% MS 7,984 37.3 1,269 279,235 437.9 224 173 S-5(CR) T- FC 85.3w% ATF 1,152 5.4 183 40,292 63.2 151 91 0kl 1,2,3(CR) TD 1.25 HSD 8,745 40.9 1.391 305,878 479.7 COKE(MT. 0.013 GCV 15,650btu/lb CGO 2,023 9.5 322 70,751 111.0 56 COKE HFO 323 1.5 51 11,308 17.7 56 CGO TCBalance 0 0.0 0 0 0.0 Total Oil Gas S 0.1w% Coker Gas 334 1.6 53 11,690 18.3 COD-A 96 96 0 Vis 4.5cst(40°C) Total 21,091 98.55 3,353 737,663 1156.9 55 H.FUEL COD-B 197 167 30 FP 99(°C) Topper Charge 21,400 100.0 3,403 748,482 1173.9 COD-C 99 60 39 GCV 17,865btu/lb Natural Gas Coker 224 0 224 880 (4.6MCF/D) Boiler 900 0 900 Fig.2.2-2 Oil refining flow Total 1.517 323 1193 CGOE(7846Kcal/L) (3) Refining System Studied 1) COD-B COD-B consists of the Preflash section, Main Fractionation section and the Stabilizer section, resulting in the refinery’s largest processing capacity of 14,000 BPSD.

Tapis Blend Crude is pumped from crude oil tanks in the refinery into the crude oil balance tank in COD-B and then into the Preflash section. The crude oil passes through five crude oil pre-heaters to be heated. The heated crude oil is then sent to the Preflash tower (C-301). The top reflux is fed from the tower top and the 180-psig saturated steam is fed from the tower bottom, respectively. Off-gas and part of the atmos naphtha are distilled from the tower top. Off-gas is sent to the Main Fractionator (C-101) with directly The atmos naphtha is sent to the downstream Stabilizer section.

The crude oil from the bottom of the Preflash Tower is pumped into the Main Fractionator section by the pump. Then, the crude oil is heated to a specified temperature in the furnace and then is sent to the Main Fractionator. The Main Fractionator of a steam-stripping type is equipped with the Side Strippers (C-102, C-103 and C-104) to adjust the flash points of light kerosene, medium kerosene and gas oil. In the Main Fractionator, two kinds of reflux (top reflux and medium pump around) are fed to the tower top and middle and the superheated steam is fed to the tower bottom. Then, it is separated into the Main Fractionator off-gas, naphtha, lightkerosene, medium kerosene, gasoil and residue oil. The light and medium kerosene and gas oil are processed for the adjustment of the flash points and then are sent to the intermediate product tanks as products of this unit. All the residue oil is sent down to the coker plant as feed stock.

Naphtha from the Main Fractionator top is mixed with another naphtha from the top of the Preflash Tower. The whole naphtha gets heat exchange with the product naphtha in the stabilizer pre-heater (E-307) and then is sent to the Stabilizer (C-308), The stabilizer is a reboiler-type distillation tower and uses the 180 psig saturated steam fed as a heat source of the reboiler. With top reflux, stabilizer off-gas and

2-18 LPG are distilled from the top, and motor spirit is distilled from the bottom. Then, the LPG is sent down to the coker plant and gets after treatment. The motor spirit is sent to the intermediate product tanks as a product of this unit. The stabilizer off-gas is mixed with Main Fractionator off-gas and then is emitted into the atmosphere without combustion.

Figure 2.2-4 in the following pages shows a schematic flow of this unit and Fig. 2.2-5 is a picture of COD-B.

2-19 2-20 9 |l 0

NOTE :

C—301 PREFLASH TOWER H —101 CHARGE HEATER V-303 PREFLASH TOWER OVERHEAD RECEIVER HE—101 CRUDE/O.H. HEAT EXCHANGER HE-101MK CRUDE/MK HEAT EXCHANGER HE—102 CRUDE/MPA HEAT EXCHANGER HE—103 CRUDE/GAS OIL HEAT EXCHANGER HE—104 CRUDE/RESIDUE HEAT EXCHANGER HE—107 MEDIUM KEROSENE COOLER HE-108 GAS OIL COOLER HE—109 RESIDUE COOLER HE—302 PREFLASH TOWER OVERHEAD CONDENSER P-101A/B CRUDE CHARGE PUMP P-304A/B PREFLASH TOWER REFLUX PUMP P-305A/B PREFLASH TOWER BTM PUMP

FOR

PROCESS FLOW SHEET COD-B PREFLASH TOWER SECTION COPY

zrxEXDB-j’UDUVkiiftn cosmo mGinsRino cq , un

THIS DRAWING. AND ALL DESIGN DETAILS AND DATA SHOWN HEREON, IS IHE SOLE PROPERTY OF COSMO ENGINEERING C0..LTD OF TOKYO, JAPAN. AND SHALL NOT BE REPRODUCED IN ANY MANNER, OR USED FOR ANY PURPOSE WHATSOEVER, EXCEPT BY WRITTEN PERMISION OF COSMO ENGINEERING CO.,LTD.

SCALE. NONE PROJECT DEPT.2 CHK’D JOB no. 108—DO—006—9 APP’D PREP'D DR'N Fig.2.2-4 Process flow sheet of COD-B(l/3) DATE 18. JAN,2001 N.O Y.K SH.NO. DWG.NO. REV.

REV.NO. DESCRIPTION DATE BY CHK'D APP'D F2-A-2061 NEDOFSMPE-PD-003- <0> TOTAL t 0

NOTE :

C—101 Atmospheric tower C-102A/B/C SIDE STRIPPER OFF GAS HE-105A/B V-101 OVHD ACCUMULATOR TO ATMOSPHERE HE-105A/B O.H. CONDENSER H/C MIXTURE %> HE—106 LIGHT KEROSENE COOLER FROM HE-101 (NEDOFSMPE-PD-003) HE-110 SLOP CUT COOLER P-102A/B BENZINE REFLUX PUMP P-103A/B MEDIUM KEROSENE PRODUCT PUMP P-104A/B MEDIUM PUMP AROUND PUMP P-105 GAS OIL PRODUCT PUMP H/C VAPOR P-106A/B RESIDUE PRODUCT PUMP TO HE-101 (NEDOFSMPE-PD-003) P-306A/B BENZINE STAB. FEED PUMP

FOUL WATER

NAPHTHA TO HE—307A/B (NEDOFSMPE—PD-005)

SLOP CUT %>

TO TANK

MEDIUM PUMP AROUND FROM HE-102 (NEDOFSMPE-PD-003)

LIGHT KEROSENE TO TANK

MEDIUM PUMP < AROUND TO HE-102 (NEDOFSMPE-PD-003) MEDIUM KEROSENE%>

TO HE-101MK (NEDOFSMPE-PD-003)

CRUDE OIL %> FOR

FROM H—101 (NEDOFSMPE-PD-003) PROCESS FLOW SHEET COD-B ATMOSPHERIC TOWER SECTION SIGNAL TO LCV COPY (NEDOFSMPE-PD-003) GAS OIL > TO HE-103 ICTEIDzJZPLOfJttitfitt (NEDOFSMPE-PD-003) cosmo mansRinG cq. un

RESIDUE OIL %> THIS DRAWING, AND ALL DESIGN DETAILS AND DATA SHOWN HEREON. IS THE TO HE-104- SOLE PROPERTY OF COSMO ENGINEERING CO.,LTD OF TOKYO, JAPAN, AND SHALL (NEDOFSMPE-PD-003) NOT BE REPRODUCED IN ANY MANNER, OR USED FOR ANY PURPOSE WHATSOEVER, P-106A/B EXCEPT BY WRITTEN PERMISION OF COSMO ENGINEERING CO.,LTD.

SCALE. NONE PROJECT DEPT.2

JOB NO. 108-D0-006-9 APP'D CHK'D PREP'D DR'N Fig.2.2-4 Process flow sheet of COD-B(2/3) DATE 18. JAN,2001 N.O Y.K SH.NO. DWG.NO. rev.

REV.NO. DESCRIPTION DATE BY CHK'D APP'D F2-A-2062 NEDOFSMPE-PD-004- <0> ror«. l 2 I 3 4 I 5 6 7 8 I 9 1 0

NOTE :

C-308 STABILIZER V-310 STABILIZER OVERHEAD RECEIVER HE-307A/B STABILIZER FEED/8TM HEAT A EXCHANGER HE-309 STABILIZER OVERHEAD CONDENSER HE—312 STABILIZER REBOILER HE-313 BENZINE COOLER OFF GAS P-311 A/B STABILIZER REFLUX PUMP TO ATMOSPHERE HE-309

OFF GAS %>

TO FUEL GAS SYSTEM

V-310 B

C-308 FOUL WATER

NAPHTHA P—311A/B HE—307A/B FROM P-304A/B (NEDOFSMPE-PD-003)

C NAPHTHA FROM P-306A/B (NEDOFSMPE-PD-004) WHOLE LPG %>

TO COKER PLANT

HE—312

D

MOTOR SPIRIT %>

TO TANK FOR

E PROCESS FLOW SHEET COD-B STABILIZER SECTION COPY zcpEiDszpuDfJttitaa Cosmo HKarBRffTG CQ. LTD

THIS DRAWING, AND ALL DESIGN DETAILS AND DATA SHOWN HEREON, IS THE SOLE PROPERTY OF COSMO ENGINEERING CO..LTD OF TOKYO, JAPAN, AND SHALL NOT BE REPRODUCED IN ANY MANNER, OR USED FOR ANY PURPOSE WHATSOEVER, EXCEPT BY WRITTEN PERMISION OF COSMO ENGINEERING CO..LTD. F SCALE. NONE PROJECT DEPT.2

JOB NO. 108-D0-006-9 APP'D CHK’D PREP'D DR'N <5 Fig.2.2-4 Process flow sheet of COD-B(3/3) DATE 18.JAN,2001 N.O Y.K

SH.NO. DWG.NO. REV.

tev.no. DESCRIPTION DATE BY CHK’D APP'D F2-A-2063 NEDOFSMRE-PD-005- <0> TOTAL 2) COD-C The refinery s newest crude oil distillation unit, COD-C, consists of a preflash section, a main fractionator section and a stabilizer section as well as COD-B, resulting in a processing capacity of 6,000 BPSD.

Tapis Blend Crude is pumped by crude oil pumps from crude oil tanks in the refinery into a crude oil balance tank (TK-106) in COD-C and then into the preflash section. The crude oil passes through five crude oil pre-heaters. The oil is heated with top pump around, aviation turbine fuel, light gas oil, topped crude and heavy gas oil in each pre-heater, and then is sent to a preflash drum (TW-101). COD-C is a preflash drum type, different from COD-B. The off gas from the top is sent to a main fractionator (TW-102) directry.

The crude oil from the bottom of the preflash drum gets heat exchange with topped crude in a crude oil pre-heater (HE-106) and then is supplied to the main fractionator. Then, the crude oil is heated to a specified temperature in the furnace and then is sent to the main fractionator. The steam-stripping-type main fractionator is equipped with side strippers (TW-103, TW-104 and TW-105) to adjust the flash points of hght kerosene, hght gas oil and heavy gas oil. In the steam-stripping type side strippers, superheated steam is fed to the tower bottom. In the main fractionator, top reflux and medium pump around are supphed to the tower top and middle and the superheated steam is fed to the tower bottom. And it is separated into main fractionator off-gas, naphtha, hght kerosene, medium kerosene, gas oil and residue oil. The hght kerosene, hght and heavy gas oil are processed for the adjustment of the flash points and then are sent to the intermediate product tanks as products of this equipment. Part of the topped crude is used as fuel of the furnace in COD-C and the most topped crude is sent down to the coker plant as material.

Naphtha from the main fractionator top gets heat exchange with motor spirit in stabilizer material pre-heaters. The heated naphtha is then sent to a stabilizer (TW-106). The stabilizer is a reboiler-type fractionator and uses topped crude as a heat source of the reboiler. With top reflux, stabilizer off-gas and LPG are distilled from the tower top, and motor spirit is distilled from the tower bottom, LPG is sent down to the coker plant and then gets after treatment. The motor spirit is

2-28 sent to the intermediate product tanks as a product of this unit. As in COD-B, the stabilizer off-gas is mixed with main fractionator off-gas and then is emitted into the atmosphere without combustion.

Figure 2.2-6 in the following pages shows a schematic flow of this unit and Fig. 2.2-7 shows a picture of COD-C.

2-29 2-30 1 I 2 3 4 5 6 7 8 9

NOTE : HE—101 SIDE REFLUX HEAT EXCHANGER TO TANK HE—102 KERO HEAT EXCHANGER HE—103 LIGHT GO HEAT EXCHANGER HE-104 TOPPED CRUDE HEAT EXCHANGER - H/C VAPOR %> HE-105 HEAVY GO HEAT EXCHANGER TO TW-102 HE-106 PREFLASHED CRUDE HEAT (NEDOFSMPE-PD-007) EXCHANGER TW-101 HE-108 KERO COOLER HE—109 LIGHT GO COOLER HE-104 HE—110 HEAVY GO COOLER

B HE—111 TOPPED CRUDE COOLER HE-105 PU-101A/B CRUDE CHARGE PUMP PU-102A/B 0!£4- CRUDE CHARGE HEATER FEED PUMP N /I \/

CRUDE OIL -er TO TW-102 FU—101 (NEDOFSMPE-PD-007) PU-102A/B —

FROM HE—114 C (NEDOFSMPE-PD-008)

-0- TOPPED CRUDE %>

;w TO TANK HE—111

-

-TOP PUMP AROUND TO TW-102 (NEDOFSMPE-PD-007)

< KEROSENE FROM PU —105 A/B ©- (NEDOFSMPE-PD-007)

KEROSENE > cw TO TANK FOR CRUDE OIL HE-108 FROM TANK < LGO PROCESS FLOW SHEET FROM PU-106A/B (NEDOFSMPE-PD-007) COD-C TK-106 -0 PREFLASH SECTION LGO > COPY cw TO TANK HE-101 HE-102 HE—103 HE-109 cosmo EnanBERinc cq . ltd

THIS DRAWING, AND ALL DESIGN DETAILS AND DATA SHOWN HEREON, IS THE -er SOLE PROPERTY OF COSMO ENGINEERING CO.,LTD OF TOKYO, JAPAN, AND SHALL PU-101 A/B NOT BE REPRODUCED IN ANY MANNER, OR USED FOR ANY PURPOSE WHATSOEVER, EXCEPT BY WRITTEN PERMISION OF COSMO ENGINEERING CO..LTD.

SCALE. NONE PROJECT DEPT.2

JOB NO. 108-D0—006—9 APPD CHK'D PREP'D DR'N <5 Fig.2.2-6 Process flow sheet of C0D-C(l/3) DATE 18.JAN,2001 N.O Y.K SH.NO. DWG.NO. REV.

REV.NO. DESCRIPTION DATE BY CHK'D APP'O F2-A-2064 NEDOFSMPE-PD-006- <0> rorM. 1 0

NOTE :

TW—102 MAIN FRACTIONATOR TW—103 KERO STRIPPER TW—104 LIGHT GO STRIPPER TW— 105 HEAVY GO STRIPPER VE—101 MAIN FRACTIONATOR 0/H DRUM HE—107A/B MAIN FRACTIONATOR 0/H CONDENSER PU-103A/B SIDE REFLUX PUMP PU-104A/B MAIN FRACTIONATOR REFLUX PUMP PU-105A/B KERO DRAW OFF PUMP PU-106 A/8 LIGHT GO DRAW OFF PUMP PU-107A/B HEAVY GO DRAW OFF PUMP PU-108A/B TOPPED CRUDE DRAW OFF PUMP PU-109A/B MAIN FRACTIONATOR WATER CIRC.PUMP PU—110A/B STABILIZER FEED PUMP

FOR

PROCESS FLOW SHEET COD-C MAIN FRACTIONATOR SECTION COPY □DFEXDSZPUDfXttiiCaa Cosmo HTGinBERIfiG CQ, UD

THIS DRAWING, AND ALL DESIGN DETAILS AND DATA SHOWN HEREON, IS THE SOLE PROPERTY OF COSMO ENGINEERING CO..LTD OF TOKYO, JAPAN. AND SHALL NOT BE REPRODUCED IN ANY MANNER, OR USED FOR ANY PURPOSE WHATSOEVER, EXCEPT BY WRITTEN PERMISION OF COSMO ENGINEERING CO.,LTD.

SCALE. NONE PROJECT DEPT.2 CHK'D PREP'D DR'N JOB NO. 108-D0-006—9 APP'O Fig.2.2-6 Process flow sheet of 000-0(2/3) DATE 18.JAN,2001 N.O Y.K SH.NO. DWG. NO. 4>REV. REV.NO. DESCRIPTION DATE BY CHK'O APP'O F2-A-2065 NEDOFS mPE-PD- 007- TOTAL 9 I 1 o

NOTE :

TW-106 STABILIZER VE-102 STABILIZER O/H DRUM HE—112A/B STABILIZER FEED/BTM HEAT EXCHANGER HE-113 STABILIZER O/H CONDENSER HE-114 STABILIZER REBOILER HE—115 NAPHTHA COOLER PU-111A/B STABILIZER REFLUX PUMP

FOR

PROCESS FLOW SHEET COD-C STABILIZER SECTION copy

(NED0FSMPE-PD-006) cosmo BKanBRmG cq . un

THIS DRAWING. AND ALL DESIGN DETAILS AND DATA SHOWN HEREON, IS THE SOLE PROPERTY OF COSMO ENGINEERING CO..LTD OF TOKYO, JAPAN. AND SHALL NOT BE REPRODUCED IN ANY MANNER. OR USED FOR ANY PURPOSE WHATSOEVER, EXCEPT BY WRITTEN PERMISION OF COSMO ENGINEERING CO.,LTD.

SCALE. NONE PROJECT DEPT.2

JOB NO. 108-D0-006-9 APP'D CHK'D PREP'D DR’N Fig.2.2-6 Process flow sheet of COD-C(3/3) DATE 18. JAN,2001 N.O Y.K SH.NO. DWG.NO. REV.

3EV.NO. DESCRIPTION DATE BY CHK'D APP'D F2-A-2066 NEDOFSMPE-PD-008- <0> TOTAL 3) Coker plant The coker plant has a processing capacity of 5,200 BPSD to refine coker off-gas, LPG, coker naphtha, coker gas oil, heavy coker gas oil and coke from topped crude. UOP has the license of this equipment. This coker plant consists of Coking section, Gas section, LPG malox section, LPG reforming section, LPG recovery section, a water treatment section, a blow down section and de-coking equipment.

a) Coking section The coking section is a main section in the coker plant to treat topped crude. This coking section consists of a fractionator (TW-501), a furnace (FU-501), two coke chambers (VE-501A/B), Coke GO stripper (TW-502) and a coke chamber condensate drum (VE-551). The two coke chambers work alternately at a cycle of 48 hours to repeat reaction and regeneration processes.

b) Gas section The gas section consists of an off-gas compressor (CO-501), a H.P separator (VE- 504), an Absorber (TW-503), a Debutanizer (TW-504), a Deethanizer (TW-505) and Soda washing equipment to treat hydrocarbons distilled from the coking section.

c) LPG malox section The LPG malox section consists of an LPG cleaning section and a regeneration section to remove mercaptan and H2S contained in LPG with caustic washing. The 10° Be' (Borne) and 20° Be' are used as solvent.

d) LPG reforming section The LPG reforming section consists of a water wash tower (TW-701), a surge drum (VE-701) and a reactor (RX-701) to produce polymer gasoline from olefin in LPG.

e) LPG recovery section The LPG recovery section consists of a Depropanizer (TW-801), a propane dryer (TW-802) and a Debutanizer (TW-803) to recover propane, butane and polymer gasoline.

f) Water treatment section and blow down section The water treatment section, the blow down section and the De-coking equipment work discontinuously. This is because these operate during regeneration in the

2-38 coke chambers of the coking section only. The water treatment section and the blow down section consist of a coke pit (BS- 552), a settling pit (BS-553), a water clarifier (BS-551), a jet water storage tank (TK-551), a sump condenser (TW-551), a sump condenser KO drum (VE-552), a sump condenser separator (VE-553) and a water pit (BS-554). g) De-coking equipment The coke chambers works to 24 hours of the reaction process followed by 24 hours of the regeneration process.

Figure 2.2-8 in the following pages shows a schematic flow of this coking section, and Figure 2.2-9 shows a picture of coker plant.

2-39 2-40 1 0

NOTE :

-TO SPILBACK CV TK-2001 TC BALANCE TANK (NEDOFSMPE-PD—011) TW-501 FRACTIONATOR TW-502 COKER GO STRIPPER VE-502 FRACTIONATOR 0/H DRUM © © •TO FLARE HE-501A/B FEED /GO EXCHANGER OO HE-502 COKER GO COOLER CW OFF GAS VE—502 > HE-502T COKER GO TRIM COOLER HE—503 HE-503T TO VE-503 (NEDOFSMPE-PD-011) HE-503 FRACTIONATOR 0/H CONDENSER HE-503T FRACTIONATOR 0/H CONDENSER 28 TRIM COOLER •GLAND SEAL OIL RETURN PU-501 A/B CHARGE PUMP 21 <2/ PU-502A/B FRACTIONATOR BTM PUMP PU-504A/B CIRCULATION GO PUMP 19 PU-505A/B PRODUCT GO PUMP FOUL WATER -«----- CM COKER NAPHTHA a PU-506A/B FRACTIONATOR REFLUX PUMP -a TO HE—504 (NEDOFSMPE-PD-011) PU-510A/B FRACTIONATOR 0/H WASTE TW-502 PU-510A/B PU-506A/B WATER PUMP 11

TW—501 —PfQ < HEAVY COKER GO 9 1 8 TO PU-503A/B (NED0FSMPE-PD-010)

H/C VAPOR ^>-

FROM VE-551 (NED0FSMPE-PD-010) H/C LIQUID ►___ 6 -SMP FROM VE-551 (NEDOFSMPE—PD-010) B-i COKE CHAMBER X EFFLUENT > FROM VE-501A/B (NED0FSMPE-PD-010)

COKER GAS OIL %>

PU-502A/B COKER GO > TO HE-506 (NEDOFSMPE-PD—011) < COKER GO FROM TW-503 (NEDOFSMPE-PD—011) HEAVY COKER GO FROM HE-515 (NEDOFSMPE-PD—012)

FOR

TOPPED CRUDE PROCESS FLOW SHEET FROM COD'S TK-2001 COKER PLANT PU-501 A/B COKING SECTION (1/2) copy

cosmo BnanBERnc ca un

THIS DRAWING. AND ALL DESIGN DETAILS AND DATA SHOWN HEREON. IS THE SOLE PROPERTY OF COSMO ENGINEERING CO..LTD OF TOKYO. JAPAN. AND SHALL NOT BE REPRODUCED IN ANY MANNER, OR USED FOR ANY PURPOSE WHATSOEVER EXCEPT BY WRITTEN PERMISION OF COSMO ENGINEERING CO.,LTD.

SCALE. NONE PROJECT DEPT2

JOB NO. 108—D0-006-9 APP'D CHK'D PREP'D DR'N Fig.2.2-8 Process flow sheet of Coking Section(1/2) DATE 2001- 1- 4 NO S.A SH.NO. DWG.NO. REV.

REV.NO. DESCRIPTION DATE BY CHK'D APP'D F2-A-2043A NEDOFSMPE-PD-009- <0> rorAL I I I I I 1 2 I 3 I 4 | 5 6 7 | 8 | 9 |IJO

NOTE :

FU—501 : COKING HEATER VE-501 A/8 : COKE CHAMBER VE—551 : COKE CHAMBER CONDENSATE DRUM PU-503A/B : HEAVY COKER GO DRAW OFF PUMP PU-551A/B : COKE CHAMBER CONDENSATE PUMP COKE CHAMBER EFFLUENT TO TW—501 (NEDOFSMPE-PD-009)

ANTI FOAM t H*

HEAVY COKER GO FROM TW—501 PU-503A/B (NEDOFSMPE-PD-009) VE-501 A/B

- H/C VAPOR L> VE-551 TO TW—501 (NEDOFSMPE-PD-009)

FU-501 SMP CW FOR FOR PURGE COOLING

■ H/C LIQUID FOUL WATER TO TW—501 (NEDOFSMPE-PD-009)

TOPPED CRUDE FROM PU-502A/B

■ HEAVY COKER GO %>

TO HE—515 (NED0FSMPE-PD-012)

PROCESS FLOW SHEET COKER PLANT COKING SECTION (2/2)

cosmo BiansRix:cq . un

THIS DRAWING, AND ALL DESIGN DETAILS AND DATA SHOWN HEREON. IS THE SOLE PROPERTY OF COSMO ENGINEERING CO.,LTD OF TOKYO, JAPAN. AND SHALL NOT BE REPRODUCED IN ANY MANNER, OR USED FOR ANY PURPOSE WHATSOEVER, EXCEPT BY WRITTEN PERMISION OF COSMO ENGINEERING CO..LTD. Fig.2.2-8 Process flow sheet of Coking Section(2/2) NONE PROJECT DEPT2 JOB NO. 108—DO—006—9 CHK'D PREP'D

DATE 2001- 1- 4 DWG.NO. REV.

DESCRIPTION F2-A-2043B NEDOFSMPE-PD-010- <0> (4) Analysis of the current operation We analyzed the conditions of the current operation based on the operation data by our site surveys. Our examination result is shown below. An overall analysis of the current operation is shown in 1). The detailed reports of each items are shown in 2) and the followings.

1) Overall analysis a) COD-A COD-A has a processing capacity of 6,000 BPSD in its original design. However, it had been stopped working when we visited the refinery. Actually, it worked

Uiiiy iUi dUUUL iiVc udj'o icioL UILIJ, UUl iicib HUL WvX ix£5U. oiliCc LiicXi -L JJ.C IAJ Ldl operating time is only around 21 days throughout the year. This unit was built in 1957, using the old parts that had been made before the World War II. Therefore, the aged equipment will be unable to operate constantly any more.

b)COD-B COD-B has a processing capacity of 14,000 BPSD in its original design. At present, it works at HSD (High Speed Diesel) mode.of 9,800 BPSD. The present operation rate is about 70 %. Crude oil is supplied from the crude oil balance tank at 29.5 °C. The crude oil is pre heated up to 133.7 °C in five crude oil pre-heaters, and then, is sent to the preflash tower (C-301). The processed crude oil is heated up to 298 °C in the furnace and then is separated into each product in the main fractionator (C-101). Light products (LPG and atmos naphtha) is separated into each products in the downstream stabilizer (C-308). Products refined in COD-B are LPG, motor spirit, light kerosene, medium kerosene, gas oil and residue oil that is a feed stock of coker plant. Table 2.2-5 and Table 2.2-6 show the yields of products and their properties, respectively.

2-46 Table 2.2-5 Yields of products in COD-B Products BPSD Yield Vol% Crude Oil 9,800 100.0 Gas Loss 245 2.5 LPG 69 0.7 Motor Spirit 3,351 34.2 Light Kerosene 980 10.0 Medium Kerosene 1,578 16.1 Gas Oil 1,833 18.7 Residue Oil 1,744 17.8

Table 2.2-6 Properties of products in COD-B Analysis Results Motor Light Medium Gas Oil Residue Spirit Kerosene Kerosene Oil Sp.Gr. @60/60 ° F 0.7308 0.7925 0.8216 0.8339 0.8680 Flash Point °C 65.6 90.6 104.4 Distillation °C ITB 43 176 196 231 5 vol% 63 188 216 250 10 vol% 73 195 227 262 95 vol% 167 232 313 350+ EP 184 238 325 350+

In addition, the heat release and the absorbed duty calculated from the current operation data are 9.8 X106 kcal/h and 6.6 X106 kcal/h. The operation rate of COD-B is about 70 % as mentioned above. The neck points are as follows. •

• Sludge in Tapis Blend Crude has been accumulated in the crude oil tanks due to the long-term use. The sludge occasionally comes into the unit so that the heat exchangers get fouling seriously. Therefore, the heat exchangers cannot show their design performance. • The small number of the crude oil tanks does not allow us to temporarily close some of them to take countermeasures against sludge. • The shortage of maintenance equipment (heat exchanger cleaning equipment) results in poor cleaning of the heat exchangers. Fouling and choking in the heat exchanger tubes thus lower the performance of the heat exchangers. • A lot of plugs are used to fix leakage points in the heat exchanger tubes. This significantly lowers the performance of the heat exchangers. • The deterioration of the furnace tubes is at the risk of local overheat or leakage due to coking. This determines the actual capacity At present, the

2-47 maximum load is 70 % of the design capacity) of the furnace.

Improvement of these problems can dramatically effect both greenhouse gas reduction and energy saving in the furnace. c) COD-C The operation rate of COD-C at ATF (Aviation Turbine Fuel) mode is 90 %, 5,400 BPSD, of the designcapacity of 6,000 BPSD. Crude oil is supplied from the crude oil balance tank (TK-106) at 31 °C and is sent to the furnace (FU-101). The oil heated up to 311 °C in the furnace is separated into each product in the main fractionator. The light products (LPG and Naphtha) are separated into each product in the downstream stabilizer (TW-106).

The currently refined products in COD-C are motor spirit, aviation turbine fuel, lightgas oil, heavy gas oil and topped crude that is used as feed stock in the coker plant. Table 2.2-7 and Table 2.2-8 show the yields of products and the properties of products, as of September 14, 2000, issued by Thanlyin Refinery.

Table 2.2-7 Yields of products in COD-C Products BPSD Yield Vol% Crude Oil 5,400 100.0 Gas Loss 135 2.5 Motor Spirit 1,453 26.9 Aviation Turbine Fuel 1,026 19.0 Light Gas Oil 1,215 22.5 Heavy Gas Oil 443 8.2 Topped Crude 1,129 20.9

Table 2.2-8 Properties of products in COD-C Analysis Results Motor ATF Light Heavy Topped Spirit Gas Oil Gas Oil Crude Sp.Gr. @60/60 ° F 0.7122 0.7811 0.8170 0.8220 0.8670 Flash Point °C 44.4 85.6 101.7 Distillation °C IBP 40 155 178 222 5 vol% 54 167 187 244 10 vol% 65 177 198 254 95 vol% 144 219 267 350+ EP 156 232 283 350+

The present heat release of the furnace is calculated 5.8 X 106 kcal/hr based on

2-48 the operation data. On the other hand, the necessary absorbed duty is calculated

4.1 X 106 kcal/hr. COD-C almost always operates at a rate of 90 %. There seems to be no significant decline in the crude oil processing capacity. Yet, we can improve the processing to reduce greenhouse gases and to save energy more. Some topics for the improvement in COD-C are summarized as below:

• In COD-C as well as COD-B, a lot of tank sludge has been formed in the heat exchangers. This significantly lowers the heat exchangers’ performance. • In COD-C as well as COD-B, the shortage of maintenance equipments (heat exchanger cleaning equipments) results in poor cleaning of the heat exchangers. Fouling and choking in the heat exchanger tubes thus lower the performance of the heat exchangers. • A lot of plugs are used to stop leakage in the heat exchanger tubes. This significantly lowers the performance of the heat exchangers. • The yield of topped crude, which is a heat source of stabilizer reboiler, from the current Tapis Blend Crude is lower than the design value. As a result, heat source of the stabilizer reboiler is insufficient. • The stabilizer does not work at present. As a result, fight hydrocarbons (methane, ethane and LPG) in naphtha evaporate from intermediate product tanks into the atmosphere.

Improvement of these points and the operation efficiency can lead to some greenhouse gas reduction and much energy saving in the furnace and the intermediate tanks. d)Power Plant (Steam turbine generator) Thanlyin Refinery has a Boiler turbine generator (abbreviated as BTG) made in 1980 for its domestic use. Almost all electricity needed in the refinery is generated with a combination of 6,000 kW steam turbine power generator (extraction type) and 65 ton/hr boiler (BO-401). Some parts of the generated steam bypasses turbines or is extracted for steam feed in the refinery as well. The 20-year-old BTG has the following problems: •

• Trips occur several times a year due to insufficient vacuum. • Lowered power generation (4,000 kW at a maximum at present).

2-49 Increased fuel consumption in the boiler.

According to a calculation of the overall heat efficiency in the BTG, the present efficiency is 45 % at the most, lower than the design value, about 60 %. This indicates the lowered performance of the BTG although there may be some little differences in the heat/electricity ratio (Table 2.2-9). One of the main reasons is perhaps the insufficient vacuum due to the fouling of the condenser. As a whole, however, the existing BTG itself is too aged to continue operating. Rather, we should replace the existing BTG with a new one to improve heat efficiency. The existing BTG could be backup equipment. This idea, probably the best, can lead not only to the saving of the fuel cost of the boiler and the reduction of C02, but also to the improvement of the reliability in utility supply. Such improvement can greatly contribute to the safe operation at the refinery

Table 2.2-9 Current operation and design conditions of the power plant Condition Current Operation Design Condition Fuel Consumption Duty (kcal/hr) 45,922,000 49,028,100 Power Output (kW) 3,457 6,000 Power Output Duty (kcal/hr) 2,973,000 5,160,000 (#1) Steam Output Duty (kcal/hr) 17,738,500 24,222,000 Total Output Duty (kcal/hr) 20,711,500 29,382,000 Total Effective Efficiency (%) 45.1 59.93 (Note) : (#1) 6,000X860 = 5,160,000 kcal/hr 1 kW = 860 kcal/hr

Under a current operation of the existing boiler, oxygen in flue gases is 6 %. The excess air ratio is 34.3 %. The flue gas temperature is 320 °C. The heat

efficiency of the boiler is 77.2 %. According to the design, the heat efficiency is 80.1 %. This shows that we observe only a little decline. Table 2.2-10 shows the current operation and design conditions of the boiler, and Figure 2.2-10 shows a picture of the BTG.

Table 2.2-10 Current operation and design conditions of the boiler. Condition Current Operation Design Condition Steam Generator (ton/hr) 54 65 Turn Down Ratio (%) 83 100 Heat Release (kcal/hr) 45,922,000 53,240,000 Heat Absorption (kcal/hr) 35,440,615 42,660,000 Efficiency (%) 77.2 80.1

2-50 cooling water is a necessary condition to make success in modernization projects on energy saving. Therefore, we should take drastic countermeasures against those cooling water problems. Figure 2.2-12 shows the water balance of the overall refinery and Fig. 2.2-13 shows a picture of the spray cooling.

2-53

1,872,000 G/D..,^ cop—X |— DIRECT COOLING BT-GAL/D(m3/h) COD-A EVAPD LOSS 144,000(27.2) 1 5 i-m PONDS COD-B EVAPD * FLY LOSS 288.000(54.4) 288,000 G/D _ CQD_g A COD-C EVAPD * FLY LOSS 144,000(27.2) 1 4 117 1 COKER EVAPD A FLY LOSS 432.000(81.6) POWER PLANT EVAPD A FLY LOSS 576,000(108.9) 144,000 G/D C0D_C | BITUMEN ? 288,000 ?(54.4) 1 3 Up SPLINKLER > V TYPE COOLING Consump os Washing 720,000(136.1) 432,000 C/D C0| 1.728.000 G/D

H3—EX 5.280.000 G/D 720.000 G/D -H WASHING WATER MEROX COUSTIC

720.000 G/D t7 TEST WATER TANK HYDROSTATIC TEST 720.000 G/D nn-m-m-m -4TANK SHIPPING YARD| TANK,JETTYH,LAB,LPG YARDS WELL WATER- (80 ton/h) 720.000 G/D -H THE OTHERS CLEANING,OVERFLOW etc.

1.728.000 G/D -H FIRE FIGHTING 422.000& G/D 105,600 G/D OLD PROCESS BOILER"

(45 ton/h) 237,600 G/D 4PURE WATER UNIT) PROCESS BOILER _HF> STEAM FOR TANK COPY (65 ton/h) POWER GENERATOR MPE Than I yin Refinery CONDENSATE RECOVERY 105,600 G/D (20 ton/h) Refinery Overall Water Balance

•jD'nttt&tt cairn 280,000G/D—Drinkibg & Sanitary Water7 SCALE. None Project No. 2 WELL WATER JOB NO. ioe-o»-oo6-» APP*D OK’D ’REPTO DftH DATE •00/Sep/05 M.H M.H Fig.2.2-12 Water balance of the overall refinery SHJIOl DWG.NO. TOTAL NEDOFSMPE—PD—021 g) Off-gas & LPG recovery Off-gasfrom the existing COD’s is emitted into the atmosphere through each vent stack without combustion. On the other hand, off-gas from the coker plant is burnt in the flare stack and then is emitted into the atmosphere. This process has the following two problems:

• The methane component with high greenhouse effects is emitted into the atmosphere. • Hydrocarbon components other than methane are lost. This is the loss of resources and a cause of air pollution.

Recycling the high-greenhouse-effect methane component and LPG that has a large domestic demand can lead to greenhouse gas reduction and energy saving. The kinds of off-gases from COD’s are shown below. Table 2.2-11 shows the composition and volume of each off-gas. As for COD-A, its stable operation is difficult. Thus, it is excluded from this examination.

• COD-B - Preflash tower off-gas - Main fractionator off-gas - Stabilizer off-gas • COD-C - Main fractionator off-gas - Stabilizer off-gas

2-56 2) Furnaces Four furnaces operate to heat the feed stock. As mentioned in 2.2.2 (1) x 2) Refining System, one furnace is for COD-A; one for COD-B; one for COD-C; and lastly, one for the coker plant. In addition, one boiler is used as the power plant.

a) COD-A (H-101) COD-A has one box-type furnace (H-101) to heat the crude oil. However, when we visited the refinery in October, 2000, the furnace was not work due to the replacement of trays in the tower and tubes of the heat exchangers and so on. MPE said the furnace was under repair to resume its operation at the end of November. Table 2.2-12 shows the design conditions of the furnace.

Table 2.2-12 Design conditions of the furnace Condition Design Condition Heat Release (Btu/hr) 24,050,000 Heat Absorption (Btu/hr) 17,554,000 Atmospheric Coil (Btu/hr) 13,420,000 Vacuum Coil (Btu/hr) 3,510,000 Steam Super Heater (Btu/hr) 624,000 Efficiency (%) 73

This furnace was constructed in 1940, and after World War II, resumed its operation in 1957. The overall facility looks old. We will need much maintenance to achieve our energy-saving target if we modify the furnace. For instance, we should replace the condensers, the tubes of the heat exchangers, the rotating machines, the tower internal, insulation of equipments and pipings. In short, partial modification will not practical solusion for the energy saving target. Therefore, we plan to set COD-A as a spare unit to COD-B and C rather than constantly operating units. We exclude COD-A from this project. To compensate the production of COD-A, we will improve the furnace of COD-B and others for the modernization project. Here, we estimate energy saving according to the above plan that reinforced COD-B to take over the production of COD-A.

b) COD-B (H-101) COD-B was constructed in 1963 with an iso-flow-type furnace (H-101). Crude oil is heated in the convection and radiation parts. Steam is heated in the

convection part. According to the design, the heat efficiency is 75 %. This is a

2-58 little small value because the furnace is not designed to recover heat of flue gas by an air pre-heater or another equipment. Under the current operation, fouling and choking in the heat exchangers of the heat recovery systems decrease the performance of the heat exchanger. As a result, an inlet temperature of the furnace is quite low. In addition, the oxygen meter does not work because the tubing for measurement clogs. We brought a portable oxygen meter (GX-85N by Riken Keiki). However, there was no inlet connection for measurement. Therefore, we were unable to measure the concentration. According to a calculation by the heat balance method with an flue gas temperature or another parameter, the oxygen is estimated as about 9 % (Dry Base; or 66 % in terms of excess air ratio). This shows a lot of heat loss in the flue gas. This is, because the malfunction of dumpers, air registersor oxygen meter disenables appropriate control of air-fuel ratio. As a result, the flue gas temperature is as high as 469°C. The furnace efficiency is as low as 67.4 %. Table 2.2-13 shows the current operation and design conditions of this furnace. (The present conditions of the steam super heater were not obtained because of the malfunction of the measurement instruments. However, this factor is thought to influence the heat calculation by about 1 %. Therefore, we neglect this influence in calculation.)

Table 2.2-13 Current operation and design conditions of the furnace Condition Current Operation Design Condition

Feed Oil Feed Oil Steam Supper Heater Heater Heater Feed Temperature In CC) 130 199 138 Out CO 298 336 343 Turn Down Ratio (%) 70 100 Heat Release (Btu/hr) 38,865,080 56,300,000 (kcal/hr) 9,794,000 14,187,600 Heat Absorption (Btu/hr) 26,190,480 41,731,030 503,000 (kcal/hr) 6,600,000 10,516,220 127,000 Efficiency (%) 67.4 75 75

Besides the above problems, the following mechanical problems affect the operation of the furnace. In short, we do not think that this furnace can continue to work for a long term.

Steadily heavy-load operation has caused damage in tubes, such as coking, bending and partly tube cut (bypasses). (Figure 2.2-15,16)

2-59 • Casters in the stack have fell out, resulting in an uneven outer surface temperature. This perhaps causes the inclination of the stack.

It is difficult to install a heat recovery facility onto the existing facilities. Therefore, we plan a new furnace. The installation of an air pre-heater, a flue gas oxygen controller, an air-fuel ratio controller, a draft controller and others is designed to maximize the heat efficiency of the new furnace. This plan can improve the bottlenecks in the COD-B operation. Thus, the decrease of the processing capacity by the absence of COD-A can be compensated.

2-60 c) COD-C (FU-101) COD-C was constructed in 1980. This is relatively new crude oil distillation unit in the refinery. The box-type furnace (FU-101) is attached to COD-C. The crude oil is heated in the convection and radiation parts. Steam is superheated in the convection part. According to the design, the heat efficiency is 77 %. This is a little small value because the furnace as well as COD-B (H-101) is not designed to recover heat of flue gas by an air pre-heater or another equipment. Under the current operation, fouling and choking in the heat exchanger tubes of the heat recovery systems lower the performance of the heat exchangers just as COD-B. As a result, an inlet temperature of the furnace is quite low. As for the combustion conditions, a portable oxygen meter instead of the local oxygen meter that had been out of order showed an oxygen concentration of 4.2 % in flue gas. This value corresponds to an excess air ratio of 22.2 %, which shows fine performance. However, the flue gas temperature was 540 °C, which was a very high value. The heat efficiency of the furnace was 70.5 %. Table 2.2-14 shows the current operation and the design conditions. (The present conditions of the steam super heater were not obtained because of the malfunction of the measurement instruments in this case just as COD-B. However, this factor is thought to influence the heat calculation by about 2 %. Therefore, we neglect this influence in calculation.)

Table 2.2-14 Current operation and the design conditions Condition Current Operation Design Condition

Feed Oil Feed Oil Steam Supper Heater Heater Heater Feed Temperature In (°C) 118 192 143 Out co 311 374 371 Turn Down Ratio (%) 90 100 Heat Release (Btu/hr) 23,092,860 (kcal/hr) 5,819,400 7,300,000 Heat Absorption (Btu/hr) 16,269,840 (kcal/hr) 4,100,000 5,514,000 110,000 Efficiency (%) 70.5 77 77

When we visited the site, we confirmed the basic functions, such as shells and tubes, worked well. Thus, we plan to install an air pre-heater, oxygen controller and a high-efficient burner as a modification plan of the furnace to save energy.

2-63 d) Coker plant (FU-501) The coker plant was constructed in 1986, which means the newest equipment in Thanlyin Refinery. This coker plant is equipped with a box-type furnace (FU- 501) for feed stock heating. Feed stock is heated in the convection and radiation parts. According to the design, the heat efficiency is 79.4 %. This is a little small value because the furnace is not designed to recover the heat of flue gas by an air pre-heater or another equipment. Under current operation, the oxygen in the fine gas was 9.6 % (according to local instruments). On the other hand, a portable oxygen meter showed 8.3 %, or 56 % in terms of excess air ratio. This high figure was obtained perhaps due to the air leakage from the damage observed on the walls of the convection and radiation parts in addition to no oxygen control in the flue gas. The flue gas temperature was 350 °C, which was a little high value. According to a calculation, the heat efficiency of the furnace was 69.3 %. Table 2.2-15 shows the current operation and the design conditions.

Table 2.2-15 Current operation and the design conditions of the furnace Condition Current Operation Design Condition

Feed Oil Feed Oil Heater Heater Feed Temperature In CO 320 336 Out CO 486 492 Turn Down Ratio (%) 66 100 Heat Release (kcal/hr) 9,183,100 17,360,000 Heat Absorption (kcal/hr) 6,362,312 13,780,000 Efficiency (%) 69.3 79.4

An air pre-heater may be installed for heat recovery from high-temperature flue gas. However, this furnace has a unique structure with two stacks by the process licensor, UOR If we install an air pre-heater facility to the furnace, the internal temperature will increase. This will result in a heavier load of combustion in the radiation part. This installation is also an influence on the size of the furnace. In addition, it will be hard to maintain the stable combustion conditions. For example, this furnace has 40 burners to control the oxygen. In fact, it is hard to automatically control air feed with maintaining a uniform combustion condition of those burners to lower the present air-fuel ratio. In short, it is very difficult to take an installation plan of oxygen control. For those reasons, we plan to repair the outer walls of the convection and radiation

2-64 parts to prevent air leakage rather than to install an energy-saving facility.

3) Performance of the Heat exchangers We examined the heat recovery ratio of the crude oil pre-heaters and the performance of each heat exchanger under the current conditions. In general, the higher a heat recovery ratio is, the less fuel a furnace consumes. Such reduction of fuel leads to greenhouse gas reduction.

a) COD-B Crude oil is heated in pre-heaters of COD-B from HE-101 (Crude/OVHD HX) to HE-101MK (Crude/TvlK HX), HE-102 (Crude/MPA HX), HE-103 (Crude/OO HX) and HE-104 (Crude/RT HX). Thus, the heated crude oil from 29.5 °C to 133.7 °C is supplied to the preflash tower. Table 2.2-16 shows the heat recovery ratio under the current operation and the designconditions. The data of the current operation in the table are based on an operation rate of 70 % (9,800 BPSD).

Table 2.2-16 Comparison of heat recovery ratio in COD-B Heat Exchangers Heat Duty (106 kcal/h) Design Current Operation 14,000BPSD 9.800BPSD HE-101 (Crude/Main Tower OVHD HX) 2.601 1.403 HE-101MK (Crude/MK HX) 0.736 0.333 HE-102 (Crude/MPA HX) 2.016 0.386 HE-103 (Crude/GO HX) 1.709 0.448 HE-104 (Crude/Residue HX) 2.066 0.394 Heat Recovery Total 9.128 2.964 Furnace Absorbed Duty 10.516 6.600 Heat Recovery Ratio (%) 46.5 31.0 Note) Heat recovery ratio is expressed as the followingequation in percentage:

Heat recovery total Heat recovery ratio X 100 Heat recovery total + Furnace absorbed duty

The present heat recovery ratio is lower than the design condition by about 16 %. The load of the furnace is low if we consider the operation rate. This is probably because the preflash tower was constructed in the upstream of the furnace in 1988 as part of modification, and thus, part of naphtha can bypass the furnace.

2-65 We calculated present fouling coefficients for the performance of each crude oil pre-heater as shown in Table 2.2-17 compared with the design conditions. Foster Wheeler Limited set the coefficients as the design conditions when constructing the pre-heaters. However, the present fouling coefficients are much higher than the design condition. This could prove that severe fouling has lowered the performance at present.

Table 2.2-17 Comparison of fouling coefficients in the crude oil pre-heaters of COD-B Item No. Service Shell Temp. Tube Temp. Fouling Coefficient CC) CO (mhr°C/kcal) Inlet Outlet Inlet Outlet Design Current Ope. HE-101 CO/Main OH HX 140 125 30 83 0.00061 0.00302 HE-101MK CO/MK HX 237 192 83 96 0.00061 0.01086 HE-102 CO/MPA HX 260 230 96 109 0.00061 0.01752 HE-103 CO/GO HX 273 198 109 123 0.00082 0.01487 HE-104 CO/RT HX 123 134 296 243 0.00143 0.03307

The reason of the fouling of the heat exchangers is that sludge in crude oil comes into the unit. In addition, insufficient cleaning of the heat exchangers at the annual routine maintenance due to a shortage of maintenance equipment (heat exchanger cleaning equipment) has caused such decrease in heat recovery ratio.

Table 2.2-18 shows the current operation and the design conditions on inlet temperature in each cooler.

Table 2.2-18 Comparison of the inlet temperatures of each cooler of COD-B Item No. Service Inlet Temperature (°C) Design Current Ope. HE-313 Benzine Cooler 75 81 HE-106 Light Kerosene Cooler 177 183 HE-107 Medium Kerosene Cooler 245 192 HE-108 Gas Oil Cooler 173 198 HE-109 Residue Cooler 208 243 Note) The crude oil pre-heater (HE-101MK) was installed in the upstream of the medium kerosene cooler (HE-107) at the time of the design. As a result, the inlet temperature is lower than the design value.

From the inlet temperatures above, some product oil is supplied at higher

2-66 temperatures than the design condition. Thus, improvement of the heat recovery ratio of the pre-heaters is necessary. Such improvement can greatly lead to in greenhouse gas reduction and energy saving. b) COD-C In COD-C, crude oil is heated in the pre-heaters from HE-101 (Side Reflux HX) to HE-102 (Kerosene HX), HE-103 (Light Gas Oil HX), HE-104 (Topped Crude HX) and HE-105 (Heavy Gas Oil HX) in order. Thus, the heated crude oil from 29.5 °C to 112.0 °C is supplied to the preflash drum. The drum is maintained under 0.9 kg/cm2G to remove light components. Light components bypass the furnace and are supplied to the main fractionator. Crude oil from the bottom of the preflash drum is heated to 118 °C in HE-106 (Preflashed Crude HX) and is supplied to the furnace. Table 2.2-19 shows the heat recovery ratios under the current operation and the design conditions. The data of the current operation in the table are based on an operation rate of 90 %.

Table 2.2-19 Comparison of the heat recovery ratios in COD-C Heat Exchangers Heat Duty (106 kcal/h) Design Current Operation 6.000BPSD 5.400BPSD HE-101 (Side Reflux HX) 0.767 0.481 HE-102 (Kerosene HX) 0.254 0.163 HE-103 (Light Gas Oil HX) 0.449 0.247 HE-104 (Topped Crude HX) 0.620 0.234 HE-105 (Heavy Gas Oil HX) 0.334 0.072 HE-106 (Preflashed Crude HX) 0.339 0.088 Heat Recovery Total 2.763 1.285 Furnace Absorbed Duty 5.084 4.100 Heat Recovery Ratio (%) 35.2 23.9

The present heat recovery ratio is lower than the design condition by about 11 %. In COD-C as well as COD-B, such a low ratio indicates the lowered performance of the heat exchanger. We calculated the present fouling coefficients from the performance of each crude oil pre-heater. Table 2.2-20 shows the calculated fouling coefficients and the design conditions. In this unit, the present fouling coefficients are much higher than the design condition just as COD-B.

2-67 Table 2.2-20 Comparison of the fouling coefficients of the crude oil pre-heaters in COD-C Item No. Service Shell Temp. Tube Temp. Fouling Coefficient CC) CC) (mhr°C/kcal) Inlet Outlet Inlet Outlet Design Current Ope. HE-101 Side Reflux HX 144 63 30 65 0.00061 0.00285 HE-102 Kerosene HX 166 100 65 77 0.00061 0.01535 HE-103 LGO HX 228 159 77 94 0.00061 0.02153 HE-104 TC HX 269 228 94 109 0.00143 0.07654 HE-105 HGO HX 242 190 109 112 0.00082 0.05262 HE-106 PFC HX 284 269 112 118 0.00143 0.04261

in UUJU-U as wen as uuu-ti, tne reasons oi tne iounng oi tne neat excnangers are that sludge in crude oil comes into the unit and that cleaning is insufficient due to a shortage of maintenance equipment (heat exchanger cleaningequipment).

Table 2.2-21 shows the current operation and the design conditions on inlet temperature in each cooler.

Table 2.2-21 Comparison of the inlet temperatures of each cooler of COD-C Item No. Service Inlet Temperature (°C) Design Current Ope. HE-115 Naphtha Cooler 101 N/A HE-108 Kerosene Cooler 100 100 HE-109 LGO Cooler 125 159 HE-110 HGO Cooler 180 190 HE-111 Topped Crude Cooler 159 228

From the inlet temperatures above, some product oil is supplied at higher temperatures than the design condition in COD-C just as COD-B. In particular, the yields for heavy gas oil and residue oil are lower than the design condition for domestic crude oil (for example, by 10 vol% for residue oil). However, the inlet temperatures are not lower than the design values. This also indicates much fouling in the heat exchangers as seen in the above comparison table of the heat exchangers.

2-68 2.2.3 Project Capability at the Project Site (MPE) (1) Technical Skills First of all, some recent major projects at Thanlyin Refinery are as follows:

1980 The power plant was constructed. 1985 The LPG terminal was constructed. 1986 The coker plant was constructed. 1998 COD-B was modified.

Foreign constructors joined all of those projects. However, the Thanlyin Refinery side took a large part of the local work. Therefore, we think the refinery has enough technical capability. Our project will require no significant difference from the above projects. We can compensate some insufficient work with clear scope of work as shown in Section 2.2.5.

(2) Management System The MPE is a governmental enterprise under control of Myanmar's Energy Planning Department to refine oil and to produce fertilizers. The sales of oil refining covered by three refineries (Thanlyin, Thanbayakan and Chauk) take about 90 % of the total sales of the MPE. Thanlyin Refinery produces more than 50 % of the total oil products of the three refineries. The number of the employees at the three refineries is about 4,500, which is more than a half of the MPE’s. Thanlyin Refinery employs about 2,300 workers. Figure 2.2-17 shows the managementstructure of Thanlyin Refinery.

2-69 Genera Manager

Planning Production Laboratory Finance Administration

Dupty G.M Dupty G.M Dupty G.M Dupty G.M Dupty G.M

Mechanical Operation Quality Account Administration Electrical COD-A,B,C Check Civil Coker Security Tele Com. Shipping Analysis Instrument Distribution

Total Number 2,308

Figure 2.2-17 Management structure of Thanlyin Refinery

(3) Management Basis and Policies Myanmar’s Energy Planning Department controls its domestic energy supply (other than electricity and coal) and entire commercial activities. MPE is a public corporation affiliated with the ministry as described before. MPE has some subsidiaries, such as refineries, fertilizer factories, a methanol factory and LPG factory as shown in Fig. 2.2-18. The ministry is responsible for their production and supply to the markets. The domestic transportation of those products to sales points is under operation of a company affiliated with MPE.

2-70 Energy Planning Department

Myanma Petrochemical Enterprise(MPE)

Thanlyin Ref. Thanbayakan Ref. Chauk Ref.

(Total number of the employees in the 3 refineries: 4,506)

Urea fertilizer factories Methanol factory LPG factory (3 locations) (523 employees) (496 employees) (2,262 employees)

Product transportation (water) (1,489 employees)

Figure 2.2-18 MPE subsidiaries

Since MPE is a public corporation affiliated with Energy Planning Department as described above, all the operational costs are contributed by the government, while all the revenue is contributed to the exchequer. Thus, MPE’s basic management policies are to comply with instructions of the ministry, put out products enough to meet the domestic demands and supply them constantly. The operational conditions of the subsidiaries of MPE are shown in Table 2.2-22. This indicates that the refineries take the largest part of the MPE’s business. In short, the stable and efficient operation of the refineries, especially Thanlyin Refinery, is the most important management policy for MPE.

2-71 Table 2.2-22 Sales of the subsidiaries No. Fiscal revenue 1998 -1999 1999-2000 kyat % kyat % (million) (million) 1 Urea fertilizer 4,357.62 9.19 4,435.61 8.40 2 Petroleum Products 42,449.13 89.52 47,859.22 90.62 3 LPG 360.92 0.76 378.51 0.72 4 Transportation 148.75 0.31 119.05 0.22 5 Methanol 23.38 0.05 0.01 0.00 6 Others 79.80 0.17 21.30 0.04 Total 47,419.60 100.00 52,813.70 100.00

Fisical 1999 - 2000 Revenue

rO.OO ■ Urea fertilizer CD Petroleum products E3LPG 0 Transportation □ Methanol □ Others

90.62

1999-2000 fiscal revenue: 52,800 kyat (l$=about 400 kyat)

(4) Financing Capability As described before, Thanlyin Refinery is a governmental enterprise under control of MPE. It has to request the fund of this project to Energy Planning Department. However, Myanmar faces severe insufficiency of foreign currencies so that it is very difficult even for the key player of the nation to budget for any project with foreign currencies. Thus, it is difficult to implement any project by funding a lot of foreign currencies without international assistance. Note that MPE will be able to raise funds for some projects being settled in the local currency due to the priority over the other ministries in budget. Practically, MPE completed the assigned work with no problem in the modernization project in 1998 under our technical instruction.

2-72 (5) Human Resources Power The number of the total employees of MPE is about 9,500. About 4,500 out of 9,500 work for the three refineries affiliated with MPE. Thanlyin Refinery has about 2,300 workers so that it has enough human resources to implement our project. In Union of Myanmar, Thanlyin and Chauk refineries started to operate in 1950 ’s. Especially, Thanlyin Refinery has taken a main role of the domestic refinery business since 1957. In recent years, the refinery has sent trainees to Japan on the invitation of the JCCP. Thus, Thanlyin Refinery could have the know-how enough to let itself operate. The modernization work in 1998 proves this evaluation. In sum, Thanlyin Refinery would be capable of implementing our project in cooperation with the Japan side.

(6) Implementation structure The implementation structure of this project is shown in Fig. 2.2-17 Management structure of Thanlyin Refinery in 2.2.3 (2) “Management System,” which indicates enough capability for this purpose.

1) Planning division • Mechanical engineers (787 workers) are for the refining facilities, utility facilities, tanks, piping, fire extinguishers, in-house construction work, transportation and setting. • Electrical engineers (146 workers) • Civil engineers (35 workers) • Communication engineers (22 workers) • Instrumental engineers (28 workers)

2) Production division • Commissioning (The regular operators join this work.) Operation

2-73 2.2.4 Project Contents at the Project Site (MPE) and Specifications of the Modified Facilities

We studied some issues on the site for the reduction of greenhouse gas and the improvement of energy saving. The details are summarized as below. Table 2.2-23 and 2.2-24 show a comparison of crude oil processing capacity among COD- A, COD-B and COD-C and the contents of work in this project, respectively.

Table 2.2-23 Comparison of crude oil processing capacity Designcapacity Current capacity After-project capacity BPSD BPSD BPSD COD-A 6,000 4,200 Standby COD-B 14,000 11,200 15,400

COD-C 6,000 6,000 6,000

Total 26,000 21,400 21,400

Table 2.2-24 Contents of this project Item Contents A Replacement of heat exchangers of COD-B Countermeasures to crude oil sludge Installingnew crude oil tank Cleaning equipment of heat exchangers B Replacement of COD-C heat exchangers C Replacement of COD-B furnace (H-101) D Modification of COD-C furnace (FU-101) E Modification of coker-plant furnace (FU-501) F Installation of new power plant G Recovery of steam loss t H Modernization of cooling water system J Recovery of off-gas and LPG of COD-B K Recovery of off-gas and LPG of COD-C L Modernization of intermediate product run-down system

(1) Energy-Saving Plan by Replacing the Heat Exchangers in Heat Recovery System 1) COD-B (Item -A) We made a modification plan to improve heat recovery based on the analysis of the current operation. The details of the modification (Item -A) are shown below.

2-74 a) Countermeasures to crude oil sludge We studied measures to sludge that had been a large problem for stable operation. At the site survey, we confirmed that the choking of the tubes in the COD unit occur once per several months and that the temperatures on furnace tube surfaces rose. At present, the crude oil tanks operate almost at full capacity and have never been cleaned since their construction. Thus, sludge comes into the COD’s even though the crude oil is withdrawn from the top (the floating head side) by swing suction. To prevent such a sludge problem, we made a modification plan based on two ideas, the modification for cleaning of the crude tanks and the removal of fouling inside the heat exchangers at regular maintenance.

More crude oil tanks could realize the enough storage time, and furthermore, the resultant easy tank rotation would enable the cleaning of the inside of the tanks. Table 2.2-25 shows the specifications of a new crude oil tank, and Table 2.2-26 shows the specifications of high-pressure jet cleaning car.

Table 2.2-25 Specifications of new crude oil tank (Item -A)

Number - 1 Tank Capacity kl 30,000 I-gal 6,604,000 Inside Diameter m 48.42 Height m 18.255

Table 2.2-26 Specifications of high-pressure jet cleaning car (Item -A)

Number - 2 Max. Pressure kg/cm2G 459 Capacity m3/h 7.2 Type - Engine b) Replacement of the Heat exchangers of Heat recovery system From the analysis of the current operation, the current heat recovery ratio of the pre-heaters is 31.0 %, which is lower than the design value by 16.0 %. In this section, we studied the rearrangement of the pre-heaters to improve the heat recovery ratio. As the analysis of the current operation, the circulation of medium pump around from the main fractionator is very small. The heat of medium pump around can effectively be used for heat recovery. At present, the operation puts weight on top reflux from the tower top. However, the medium pump around on the higher-temperature side should be more considered as long as

2-75 the quality of products is maintained.

Based on the analysis of the current operation, we made a plan to improve the heat recovery ratio. Table 2.2-27 shows the main modification points.

Table 2.2-27 Modification of COD-B heat recovery system (Item -A) Items Content HE-101 Tube rearrangement to 90° , replacement HE-101MK Tube rearrangement to 90° , replacement HE-102 Tube rearrangement to 90° , replacement HE-103 Tube rearrangement to 90° , replacement HE-104 Tube rearrangement to 90° , replacement 1 same-size heat exchanger added for 2-series system HE-500 1 heat exchanger with residue oil newly added between preflash tower and furnaces Medium pump around The circulation increase from 23.6 kl/h to 55.0 kl/h

The current tube arrangement in the pre-heaters is 60° , which a little prevents from removing the fouling on heat exchanger tube surfaces. For this reason, we adopt the arrangement of 90° . In addition, we should produce new shells because of the aging of the heat exchangers. Furthermore, a temperature of the residue oil is as high as 203 °C at the inlet of the product cooler. Thus, we should add two heat exchangers to increase heat recovery from the residue oil. Table 2.2-28 shows the heat recovery ratio in the modified pre-heaters. This modification plan could realize a rise in temperature by 38 °C at the preflash tower supply and by 58 °C at the furnace supply. As a result, the heat recovery ratio by the crude oil pre-heaters could rise by about 23 % compared with the current figure.

Table 2.2-28 Heat recovery ratios after modification of COD-B crude oil pre-heaters Heat Exchangers Heat Duty (106 kcal/h) Design Current Ope After Revamp 14,000 BPSD 11,200 BPSD 15,400 BPSD HE-101 (CO/Main Tower OVHD HX) 2.601 1.603 2.046 HE-101MK (CO/MK HX) 0.736 0.381 0.902 HE-102 (CO/MPA HX) 2.016 0.441 2.208 HE-103 (CO/GO HX) 1.709 0.512 1.234 HE-104 (COZResidue HX) 2.066 0.450 0.528

HE-500 (PCOZResidue HX) -- - - 1.273 Heat Recovery Total 9.128 3.387 8.191 Furnace Absorbed Duty 10.516 7.543 6.854 Heat Recovery Ratio (%) 46.5 31.0 54.4

2-76 Table 2.2-29 shows the energy-saving effects due to the increased heat recovery ratio and the reduced furnace load.

Table 2.2-29 Energy-saving effects by modification of COD-B crude oil pre-heaters Conditions Unit Current Operation After Revamp Throughput BPSD 11,200 15,400 Furnace Required Duty 106 kcal/h 7.543 6.854 Fired Duty 106 kcal/h 11.191 10.169 Efficiency % 67.4 67.4 Fuel Consumption kg/h 1,165.6 1,059.2 Fuel Reduction kg/h 106.4 Note) LHV of fuel oil is 9,601 kcal/hr.

From the modification described above, the inlet temperatures of each product cooler are compared as shown in Table 2.2-30. The inlet temperatures of the product coolers are improved as a whole.

Table 2.2-30 Comparison of the inlet temperatures of each product cooler of COD-B Item No. Service Inlet Temperature (°C) Design Current After Ope. Revamp HE-313 Benzine Cooler 75 81 69 HE-106 Light Kerosene Cooler 177 183 166 HE-107 Medium Kerosene Cooler 245 192 131 HE-108 Gas Oil Cooler 173 198 180 HE-109 Residue Cooler 208 243 185

New heat exchangers can be installed by stacking vertically on the crude oil pre­ heaters on the southern side of the current main fractionator.

2)COD-C (Item-B) Based on the analysis of the current operation, we made a plan to improve the heat recovery ratio. The details are shown below.

a) Countermeasures to crude oil sludge As described in the section of COD-B, the performance of the heat exchangers largely declined due to the much fouling. Therefore, some measures to sludge in the crude oil tanks are principally necessary. The same measure as those in COD-B will be adopted.

2-77 b) Replacement of Heat exchangers of Heat recovery system The current heat recovery ratio of COD-C is 23.9 %, which is lower than the design value by about 11 %. In this section, we studied a modification plan to improve the heat recovery ratio.

The analysis of the current operation, the heat recovery of top pump around is a little low. Therefore, we think the increase of the circulation is necessary for a higher heat recovery ratio. Table 2.2-31 shows a modification plan to improve the heat recovery ratio.

Table 2.2-31 Modification of COD-C heat recovery system (Item -B) Location Content HE-101 Replacement HE-102 Replacement HE-103 Replacement HE-104 Replacement HE-105 Replacement HE-106 Replacement HE-114 (Stabilizer Reboiler) Change heat source from topped crude to 180 psig saturated steam, replacement Top pump around Circulation increase from current 14.4 kl/h to 24.7 kl/h

Temperature differences between hot fluid and cold fluid in the crude oil pre­ heaters of COD-C are smaller than those in COD-B. Thus, it is difficult to improve the heat recovery ratio by the rearrangement of the heat exchangers also from an economic point of view. Moreover, the 90° tube arrangement is already adopted, which is a different point from COD-B. We think the current specifications of the crude oil pre-heaters are not needed to be changed. However, we think new heat exchangers should be installed, considering the fact that the original surfaces of the crude oil pre-heaters are no longer maintained due to the plugging and that the facilities get aged. In addition, residue oil is used as heat source of the stabilizer reboiler in the existing equipment originally designed to process domestic crude oil with a high yield of topped crude. It is thus hard to supply enough heat to the stabilizer in the existing equipment that processes Tapis Blend crude. Therefore, the modification of the stabihzer reboiler is necessary for stable operation and the excessive heat of topped cruce can be used in the heat recovery system. Table 2.2-32 shows the heat recovery ratio after the modification of the crude oil

2-78 pre-heaters. This modification can achieve a rise in temperature by 42 °C at the preflash drum supply and 55 °C at the furnace supply. As a result, the heat recovery ratio of the crude oil pre-heaters could be higher than the current value by about 21 %.

Table 2.2-32 Comparison of heat recovery ratios after modification of crude oil pre­ heaters of COD-C Heat Exchangers Heat Duty (106 kcal/h) Design Current Ope After Revamp 6,000 BPSD 6,000 BPSD 6,000 BPSD HE-101 (CO/TPAHX) 0.767 0.534 0.871 HE-102 (CO/ATF HX) 0.254 0.181 0.259 HE-103 (CO/MKHX) 0.449 0.274 0.567 HE-104 (CO/Residue HX) 0.620 0.260 0.263 HE-105 (CO/GO HX) 0.334 0.080 0.223 HE-106 (PCO/Residue HX) 0.339 0.098 0.385 Heat Recovery Total 2.763 1.427 2.568 Furnace Absorbed Duty 5.084 4.556 3.350 Heat Recovery Ratio (%) 35.2 23.9 43.4

Table 2.2-33 shows the energy-saving effects by the improvement of the heat recovery ratios.

Table 2.2-33 Energy-saving effects by the improvement of the heat recovery ratios Conditions Unit Current Operation After Revamp Throughput BPSD 6,000 6,000 Furnace Required Duty 106 kcal/h 4.556 3.350 Fired Duty 106 kcal/h 6.462 4.752 Efficiency % 70.5 . 70.5 Fuel Consumption kg/h 673.1 494.9 Fuel Reduction kg/h 178.1 Note) LHV of fuel oil is 9,601 kcal/hr.

From the above modification, the inlet temperatures of each product cooler are compared as shown in Table 2.2-34. The inlet temperatures of the product coolers are improved as a whole.

2-79 Table 2.2-34 Comparison of the inlet temperatures of each product cooler Item No. Service Inlet Temperature (°C) Design Current After Ope. Revamp HE-115 Naphtha Cooler 101 N/A 93 HE-108 Kerosene Cooler 100 100 101 HE-109 LGO Cooler 125 159 132 HE-110 HGO Cooler 180 190 155 HE-111 Topped Crude Cooler 159 228 145

New heat exchangers will be installed on the current locations.

(2) Furnace Despite the cessation of COD-A, we suppose the processing capacity of Thanlyin Refinery is the same as before. We set the calculation basis of throughput according to an annual condition of the operation.

1)COD-A(H101) The production decrease due to the cessation of COD-A will be compensated by the production increase of the remodeled COD-B. Therefore, COD-A will not be remodeled. However, the decrease of fuel in COD-A will be counted as the energy-saving effect. The calculation basis of throughput is 4,200 BPSD. The efficiency of the furnace is set as 65 % (73 % to 65 %) by the assumption that it is the same as the decrease of the efficiency of the furnace (H-101) of COD-B (75 % to 67.4 %). Table 2.2-35 shows the energy-saving effects due to the stop of COD-A.

Table 2.2-35 Energy-saving effects by the cessation of COD-A Condition After Modification Current Operation Throughput (BPSD) 0 4,200 Heat Absorption (kcal/h) 0 3,096,350 (#1) Heat Release (kcal/h) 0 4,763,620 (#2) Efficiency (%) 0 65.0 Fuel Consumption (kg/h) 0.0 496.2 (#3) Fuel Reduction (kg/h) 496.2 (Note) : (#1) 4,423,360/6,000X4,200 = 3,096,350 kcal/h (#2) 3,096,350/0.65 = 4,763,620 kcal/h (#3) 4,763,620/9,601 = 496.2 kg/h LEV of fuel oil is 9,601 kcal/hr.

2-80 2)Item-C (COD-B, H-101) With the cessation of COD-A, suppose the processing capacity of COD-B is 15,400 BPSD. Table 2.2-36 shows the specifications of a newly installed furnace. Here, the base line of the energy-saving effects is 11,200 BPSD before the modification and 15,400 BPSD after the modification according to Table 2.2-23.

Table 2.2-36 Specifications of new H-101 (Item -C) Item Content Furnace installation Manufactured according to the specifications in Table 2.2-37 and installed near the current furnace Flue gas heat recovery Installation of air pre-heater Installation of PD F and F.D.F Oxigen control facility Installation of oxygen meter, draft meter, air-fuel ratio controller and dumper Related work Connection piping, duct work and electrical and instrumental work

Table 2.2-37 shows the specifications of the new furnace and Table 2.2-38 shows the energy-saving effects of the installation of the new furnace. Fig. 2.2-19 shows a plot plan of the furnace. As the improvement of the energy saving, the fuel consumption rises by 98.3 kg/hr after the modification. This is because the increase of crude oil processing of COD-B by the cessation of COD-A. Taking into account the decrease of fuel oil in COD-A (496.2 kg/hr), we expect the energy­ saving effects in total as the decrease of fuel oil, 496.2 - 98.3 = 397.9 kg/hr, after the modification.

Table 2.2-37 Specifications of new furnace Type of Heater Box Type With Stack & A.P.H Total Heater Absorbed Duty (kcal/h) 10,940,000 Heater Efficiency (%) 89 PROCESS DESIGN CONDITION Fluid Feed Oil Steam Super Heater Heater Total Heater Absorbed Duty (kcal/h) 10,800,000 140,000 Inlet Temperature (°C) 129.1 138 Outlet Temperature (°C) 310 343 TUBE MATERIAL A335P5 A106 Gr.B A 106 Gr.B COMBUSTION DESIGN CONDITION Type of Fuel Gas,Oil & Mix. Excess Air (%) 20

2-81 Table 2.2-38 Energy-saving effects by installingnew furnace Condition After Modification Current Operation Through Put (BPSD) 15,400 11,200 Heat Absorption (kcal/h) 10,800,000 (#1) 7,543,000 (#2) Heat Release (kcal/h) 12,134,800 11,191,000 Flue Gas Outlet Temp. (°C) 190 496 Efficiency (%) 89.0 67.4 Fuel Consumption (kg/h) 1,263.9 (#3) 1,165.6 Fuel Reduction (kg/h) ▲ 98.3 Note): (#1) A heat duty of steam super heater is negligible. (#2) 6,600,000/9,800 X 11,200 = 7,543,000 kcal/h (#3) 12,134,800/9,601 = 1,263.9 kg/h

2-82 i a a a a a n 2. 13

A

N

WATER POND PIPE PIT

B FURNACE

H —101

C

CULVERT

C-301

C—101 C-102 PIPE RACK 0 SLOPE

CONTROL ROOM

PIPE'RACK

E-312

E

—5 —

F

OPEN DITCH H=300

0 5000

6172 10000 ( 3900 )

40461 (22900) (29850 )

FOR

PLOT PLAN i COD-B

cosmo EnGreB?nG ca un

IMS DRAWING, AND AIL DESIGN DETAILS AND DATA SHOWN HEREON, IS THE SOLE PROPERTY OF COSUO ENGINEERING C01ID OF TOKYO. JAPAN, AMO SHALL Fig.2.2-19 Plot plan of the furnace NOT BE REPRODUCED H ANY MANNER. OR USED FOR ANY PURPOSE WHATSOEVER, EXCEPT BY WITTEN PERMSTON OF COSMO ENGINEERING C0.1T0. j 1/150 PROJECT DEPT.2 JOB no . 100-00-006-9 1 J.FEB.2001 S.A

P1-A-1213 3)Item -D (COD-C and FU-101) The modification of the existing furnace is planned for heat recovery. The calculation basis of throughput of the energy saving is 6,000 BPSD for both before and after the modification according to Table 2.2-23. Table 2.2-39 shows the specifications of the necessary modification (Item -D) of the related facilities.

Table 2.2-39 Specifications of modification of FU-101 (Item -D) Item Content Flue gas heat recovery Installation of air pre-heater. Installation of I.D.F and F.D.F Oxygen control facilities Installation of oxygen meter, draft meter, air-fuel ratio controller and Dumper. Burner Installation of high-efficiency burner. Modification of air register Related work Connection piping, duct work, electrical and instrumental work

The energy-savingeffects include only heat recovery of the air pre-heater. The efficiency of the furnace is 81.2 % after the modification and thus about 11 % in improvement is possible. Figure 2.2-20 in the next page shows the plot plan after the modification and Table 2.2-40 shows the energy-saving effects after the modification.

Table 2.2-40 Energy-saving effects by installation of air pre-heater Condition After Modification Current Operation Throughput (BPSD) 6,000 6,000 Heat Absorption (kcal/h) 4,555,600 4,555,600 (#1) Air Pre Heater (kcal/h) 850,000 0 Heat Release (kcal/h) 5,611,840 (#2) 6,461,840 Flue Gas Outlet Temp CC) 230 540 Efficiency (%) 81.2 70.5 Fuel Consumption (kg/h) 584.5 (#3) 673.0 Fuel Reduction (kg/h) 88.5 Note): (#1) 4,100,000/5,400X6,000 = 4,555,560kcal/h (#2) 6,461,840-850,000 = 5,611,840 kcal/h (#3) 5,611,840/9,601 = 584.5 kg/h LEV of fuel oil is 9,601 kcal/hg

2-85 2-86 2 & A 9 n 19 .0

TW—102 TW—103^105

TW—101

6000 6000 5000 6000

CABLE PIT

FU —1101

HE-106

HE-105 HE-103 HE— 101

HE-104 HE-102

FOR

PLOT PLAN i COD-C

^la^cosmoBicn^nGcxxaa

IMS DRAWING. AMO ALL DESK* DUALS AMO DATA SHOW HEREON. IS THE SOLE PROPERTY OF COSMO ENGINEERING CO.,LTD OF TOKYO, JAPAN, AND SHALL NOT BE REPRODUCED W ANY MANNER. OR USED FOR ANY PURPOSE WHATSOEVER, Fig.2.2-20 Plot plan after the modification EXCEPT BY WRITTEN PERMSON OF COSMO ENCINEERWG CO..LTD.

SCALE. 1/100 PROJECT 0EPT.2 CHK'O < > JOS no. 108-00-006-9 ORN < > DATE 13.FEB.2001 S.A o SH.NO. OWC.NO. *EVNO. DESCRIPTION OAIt CHK'O APP-O PI —A—1214 <9> 4) Item -E (Coker plant and FU-501) Table 2.2-41 shows the specifications of this modification (Item -E) of FU-501.

Table 2.2-41 Specifications of modification of FU-501 (Item -E) Item Content Outer shell Repair of damaged outer shell of radiation and convection and repair of gaps of wall

The energy-saving effects by this modification will not be counted.

(3) New Power Plant (Item -F) Installing a new steam turbine generator with a similar capacity of the existing BTG could improve the efficiency of power generation. The existing BTG will be spare equipment. A new oxygen meter should be installed on the boiler facility because the current one does not work properly.

Table 2.2-42 shows the specifications of the remodeled private power generator (Work item -F).

Table 2.2-42 Specifications of new power plant (Item -F) Item Content BTG Installingnew BTG (including housing) with similar capacity.

Oxygen meter for existing Replacing the existing oxygen meter with new one boiler Related work Connection piping, electrical and instrumental work

Installing a new BTG could reduce fuel of boiler by the improvement of the efficiency of power generation, which is one of the energy-saving effects. Table 2.2-43 shows the energy saving by the modification.

2-89 Table 2.2-43 Energy-saving effects by installing new power plant Condition After Modification Current Condition Fuel Consumption (kcal/h) 33,321,300 45,922,000 Power Output (kW) 3,457 3,457 Power Output (kcal/h) 2,973,000 2,973,000 (#1) Steam Output (kcal/h) 17,175,600 17,738,500 Total Output (kcal/h) 20,148,600 20,711,500 Total Effective Efficiency (%) 60 45.1 Fuel Consumption (kg/h) 3,470.6 4,783 (#2) Fuel Reduction (kg/h) 1,312.4 Note): (#1) 3,457X860 = 2,973,000 kcal/h 1 kW = 860 kcal/hr (#2) 45,922,000/9,601 = 4,783 kg/h LHV of fuel oil is 9,601 kcal/hr.

(4) Recovery of Steam Loss (Item -G) Although about 3,000 small-diameter steam traps are installed over the refinery, many of the steam traps do not function well,which causes the steam loss of about 4 ton/hr from the steam balance. The gland leakage from valves would also be cause of the steam loss. Thus, about 40 % of the above steam traps should be replaced as the modification, assuming that they malfunction or are removed from the facilities. In addition, the modification will cover the replacement of many valves. Table 2.2-44 shows the specifications of the modification (Item -G).

Table 2.2-44 Specifications of modification against steam loss (Item -G) Item Content Steam traps About 40 % (1,200) of traps to be replaced Steam valves Valves are aged. Difficult to replace the valve gland. Thus, replace about 2,400 small-diameter valves, double number of steam traps.

Since it is difficult to measure the each steam leakage, we adopt 4 ton/hr that is the steam loss according to the actual steam balance as the energy-saving effect. Table 2.2-45 shows the energy saving by the modification against steam loss.

2-90 Table 2.2.45 Energy-saving effects by modification against steam loss Condition After Modification Current Operation Steam Output (kcal/h) 0 1,632,000 (#1) Fuel Consumption (kg/h) 0 170 (#2) Fuel Reduction (kg/h) 170 Note): (#1) 4,000 X 510 X 0.8 = 1,632,000 kcal/h About 80% of steam leakage can be recovered. The enthalpy of steam is 510 kcal/kg (#2) 1,632,000/9,601 = 170 kg/h LHV of fuel oil is 9,601 kcal/hr.

(5) Modernization of CoolingWater System (Item -H) The existing circulation system with the spray cooling cannot provide stable cooling water supply, additionally, the fouling of the coolers due to the poor water quality prevents the stable operation. For this modernization, we will install cooling tower systems on the main facilities of Thanlyin Refinery, COD-B, C, the coker plant and the power plant. The cooling tower is typical water film type. Cooling water (warm water) exhausted from each cooler flows down from the top and cooled by contacting the air from a blower in the top. The water is then circulated for reuse. Also, there are problems on the cooled water, such as corrosion and scale attachment by the circulation of water. Therefore, equipment to inject anti-corrosion agents and scale prevention agents into the cooling tower tank should be installed. Although any energy-saving effect cannot be expected by this modernization, the stable operation will be available. Table 2.2-46 shows the specifications of the modernization (Item -H).

Table 2.2-46 Specifications of remodeling of cooling water system (Oltem -H) Item Content Cooling tower Installing cooling tower systems onto COD-B (1,350 m3/hr), COD-C (700 m3/hr), coker plant (1,750 m3/hr) and power plant (1,800 m3/hr) Chemical injector Installing water-treatment-chemical and chemical injector Related work Feed pump installation, connection piping,electrical and instrumental work

2-91 (6) Off-Gas and LPG Recovery (Item -J and K) As described in the analysis of the current operation, a lot of LPG including greenhouse gases with product value is emitted into the atmosphere in the refining process of the COD. The emitted greenhouse gases contain methane component of the large global warming index 21. The emitted methane component should be decreased or converted into carbon dioxide. In this section, we studied a modification plan to reduce the methane component and recover the LPG with product value.

This modification plan is to recover LPG with product value as mush as possible, introduce the methane component with the large global warming index into the fuel gas system, burn it as furnace fuel, convert it into carbon dioxide with a smaller global warming index, reduce the greenhouse gases and improve energy­ saving effects. Table 2.2-47 shows the modification plan (Item -J) for the COD-B and Figure 2.2-48 shows the modification plan (Item -K) for the COD-C. Also, Table 2.2-21 in shows a schematic flow of the LPG recovery.

Table 2.2-47 Modification plan for recovery of off-gas & LPG in COD-B (Itern-J) Item Content LPG recovery equipment Installing new LPG recovery equipment Installing 2 off-gas compressors (150 kW) Installing compressor suction drum Installing LPG condenser and LPG separator Related work Connection piping and electrical, instrumental work

Table 2.2-48 Modification plan for recovery of off-gas & LPG in COD-C (Item-K) Item Content LPG recovery equipment Installing new LPG recovery equipment Installing 2 off-gas compressors (22 kW) Installing compressor suction drum Installing LPG condenser and LPG separator Related work Connection piping, electrical and instrumental work

2-92 CDD-BM FUEL GAS to FUEL GAS SYSTEM HE-503

OFFGAS from PREFLASH TOWER

OFFGAS from CTW RECOVERY LPG MAIN TOWER to COKER PLANT OFFGAS from STABILIZER CD-502A/B V-501

CDD-C& HE-603

OFFGAS from CTW MAIN TOWER

OFFGAS from STABILIZER

CD-602A/B FOR V-601 NEW LPG RECOVERY UNIT PROCESS FLOW SHEET

Fig.2.2-21 Process flow sheet of LPG recovery COSMO ENGINEERING CO.,LTD TOKYO. JAPAN

SCALE. NONE PROJECT 0EPT.2 JOB NQ.10&-00-006-9 PKP'DIDR'N DATE 10. JAN,2001 N.O SH.NO. DWG.NO. NEDOFSMPE—PD—023— Table 2.2-49 shows the amounts of LPG and methane recovered by this modification.

Table 2.2-49 Recovered amounts of LPG & methane Item COD-B COD-C LPG (kg/hr) 1,117 83 Methane (kg/hr) 19.2 7.5

(7) Modernization of Intermediate Product run-down system (Item -L) The run-down pumps will be replaced with a high head type to bypass the intermediate tanks for gasoline and to directly connect the units to the product tanks. Also, slop tanks will be installed to feed oil at startup and shut down. This modification could reduce the loss of hydrocarbon vapor from the intermediate tanks and thus improve air pollution. The existing intermediate tanks are used to control oil volume by depth measurement. Flow integrators should be installed for it. Table 2.2-50 shows the specifications of modernization (Item -L) of the intermediate product run down system. Figure 2.2-22 shows a schematic flow sheet after the modernization. The reduction of fuel is possible in the refining process to reproduce the loss of hydrocarbon vapor from the intermediate tanks. However, we cannot grasp the current loss of Hydrocarbon vapor. It is thus impossible to estimate energy­ saving effects. This modernization is primarily to improve air pollution.

Table 2.2-50 Specifications of modernization of intermediate product run down system (Item -L) Item Content Direct run down system to Installing 8 high-head run down pumps on each units. product tanks Slop tanks Installing 1 slop tank (1,000 kl) on COD-A, B and C , 1 slop tank (500 kl) on coker plant and 4 transportation pumps. Flow integrators Installing 4 flow integrators in each unit. Related work Connection piping, electrical and instrumental work.

2-94 NEW SLOP TANK for COD'S COD-A V-101 ATMOS TOWER D/H RECEIVER

COD-B E-313 BENZINE COOLER NEW SLOP RT'N PUMP

EXISTING CDD-B HE-115 PRODUCT NAPHTHA COOLER MOTOR SPIRIT

TANKS

NEW BOOST UP PUMPS NEW ELDW INSTRUMENTS

COKER VE-582

SETTLER

NEW RUN DOWN SYSTEM FOR MOTOR SPIRIT PROCESS FLOW SHEET

COSMO ENGINEERING CO.,LTD TOKYO, JAPAN

NONE PROJECT DEPT.2 NEW SLOP RT'N PUMP NEW SLOP TANK for COKER DWG.NO. NEDOFSMPE—PD—022— Fig.2.2-22 Process flow sheet of intermediate product run-down system 2.2.5 Scope of the Project: Funds, Facilities and Services The following ideas summarize what we think about the scope of work such as funds, equipment and services offered by the Japan and the Myanmar side for this project.

(D To implement this project, two steps, the pre-project and the project- implementation, should be considered as shown in Fig. 2.2-37. ® We should apply to the Japanese government for a yen loan to raise necessary funds. The owner of this project is thus the Myanmar side. ® The Japan side should assist and consult the Myanmar side about how to apply for the yen loan at the pre-project stage.

The following description defines the scope by each side at the pre-project stage.

(1) Scope of work by the Japan Side a) Preparation of surveys (preparatory discussion) b) On-site surveys (detailed studies) c) Preparation of basic project plans according to the surveys d) Support for obtaining necessary approval in Myanmar. e) Support for applying for the loan i) Support for making the contract g) Other consultingwork

(2) Scope of work by the Myanmar Side a) Preparation of surveys (preparatory discussion) b) Support for the site surveys c) Submission of drawings of the existing equipment in response to the Japan side d) Obtaining necessary approval in Myanmar h) Applying for the loan i) Making the contract j) Makingcontracts of implementing this project (EPC)

2.2.6 Conditions and Issues for the Implementation As described in the 2.2.3, Myanmar’s Energy Planning Department has a great interest in this project. There will be no problem on MPE’s technical skills, management system, management basis and policies, human resources power and

2-96 organization. Although it is difficult for MPE to prepare a lot of foreign currencies, MPE can offer its human resources. With a yen loan, no issues would therefore exist.

2.2.7 Proj ect Sche dule Figure 2.2-23 shows a project schedule from making a contract to starting operation. It will be realized provided the following conditions are satisfied.

- Japanese ODA, Official Development Assistance, is resumed. - The Myanmar and Japanese governments adopt the project. - Conditions for finance arrangement are settled.

Practically, further detail studies are necessary to start the project.

1 stYear 2 nd Year 3 rd Year 4 th Year Item ft ft ft Pre project 1 Detail studies 2 Apply for loan 3 Conclude a loan 4 Prepare a contract 5 Sign a contract

Project 1 Start a project 2 Basic design 3 Detail design 4 Procurement 5 Transportation 6 Construction 7 Commissioning 8 Start operation

Figure 2.2-23 Project schedule

2-97 2.3 How to Finance 2.3.1 Fund Plan to Implement the Project (Amount, Arrangement, etc.) Table 2.3-1 from the next page shows the result of estimation of the necessary amount of the funds by work item to implement this project. Table 2.3-2 shows the total amount of costs, including consultant fee, and the classification of the local currency and foreign currencies. From the estimation above, the amount of the funds, including the consultant fee and commissioning, necessary to implement this project is 4,300 million yen.

About 500 million yen, correspond to 12 % of total, or less of the costs will be able to be covered with the local currency. It means that about 3,800 million yen or more than 88 % of the total will have to be paid with foreign currencies. We assumed the necessary foreign currency here is Japanese yen. The fund-raising is expected as follows:

a) The Myanmar side will receive a budget from the government through Energy Planning Department for the amount in the local currency, which correspond to 500 million yen. In short, they will be able to raise the fund by itself.

b) Since it is difficult even for Energy Planning Department to raise the amount in foreign currencies, which correspond to 3,800 million yen, international loan is expected. Recently some humanistic help to Myanmar is permitted as the military regime takes a softer stand of politics. Thus, we assume that yen loans to Myanmar will be resumed within a few years.

2-98 Table 2.3-1 Necessary costs for each work item (million yen) Item Contents Procurement Construction Engineering Total & & Commissioning Design A Replacing heat Exchangers 33 13 4 50 ofCOD-B

Countermeasures to sludge New crude oil tanks 124 279 54 457 Cleaning equipment of 34 0 5 39 heat exchangers B Cleaning equipment of heat 26 11 4 41 exchangers C Replacing furnace (H-101) 194 102 49 345 ofCOD-B D Modifying furnace (FU-101) 57 19 14 90 ofCOD-C E Modifying furnace (FU- 501) 8 4 2 14 of coker plant F Installing new power plant 1,025 301 151 1,477

G Recovery of steam loss 90 17 9 116

H Modernization of cooling 449 153 74 676 water system J Recovery of off-gas and LPG 156 57 32 245 ofCOD-B K Recovery of off-gas and LPG 78 39 23 140 ofCOD-C L Modernization of 96 85 29 210 intermediate product run­ down system Total 2,370 1,080 450 3,900

Note): Procurement costs are estimated on the basis of the international prices. Construction costs are estimated on the basis of that in the Japanese market while some part of the work would be shared with MPE. Design and engineering cost are estimated on the basis of that in the Japanese market also.

2-99 Table 2.3-2 Total costs of the project by currencies (Unit: Million yen) Foreign Local currency Total Ratio currency 1. Consulting fee (Basic planning, project 400 0 400 9.3% management, etc.)

2. Facilities 3,400 500 3,900 90.7 % (Details) Design & engineering 450 0 450 10.5 % Procurement 2,370 0 2,370 55.1% Construction 510 470 980 22.8% Commissioning 70 30 100 2.3% 3. Total 3,800 500 4,300 Ratio 88.4 % 11.6% 100 %

2.3.2 Fund-Raising Plan (Project Plan by Cosmo Engineering Co., Ltd and MPE) As described above, in our estimation, 4,300 million yen in total, 3,800 million yen by foreign currencies and 500 million yen converted from the local currency, is necessary to implement this project. The Myanmar side will probably be able to raise the budget by the local currency, as described in 2.2.3 (4) while it will be impossible to raise the budget by foreign currencies. As described above, Myanmar faces severe insufficiency of foreign currencies. They say the amount of reserve is at most two or three hundred million dollars. Therefore, low-interest international loan is necessary to implement this project. However, governmental assistance including Japan, Europe and America have been so far suspended. The only country that supports Myanmar with finance is the People’s Republic of China. However, the Japanese government had provided a lot of voluntary help and yen loans until 1988. The power plant (Mitsubishi Heavy Industries, Ltd., 1980), the LPG terminal (Mitsubishi Heavy Industries, Ltd., 1985) and the coker plant (Mitsubishi Heavy Industries, Ltd., 1986) were built with financial support of Japan. At present, any large-scale yen loan has not yet resumed. However, some of voluntary help and grass-roots support, though small-scale activities, are in practice. It is expected that yen loan resumes and then a special low-interest yen loan is applied to this project in the near future. This project is an energy-saving project at Thanlyin Refinery. Because of the possible contribution to the global warming prevention, this project is to be

2-100 discussed on the clean development mechanism (CDM) that was introduced at the Third Conference of the Parties to the United Nations Framework Convention on Climate Change in Kyoto, 1997. Therefore, this project is appropriate to a project of special yen loan for environment. Recently some humanistic help to Myanmar is permitted as the military regime takes a softer stand of politics. Thus, yen loans to Myanmar will be resumed within a few years. The project site (MPE) has an idea of applying to the Japanese government for special yen loan for environment to raise the funds necessary to this project if the conditions are met.

2.4 Conditions of CDM (Clean Development Mechanism) 2.4.1 Coordination for Realization of CDM (Condition setting, scope, negotiation etc.) The main coordination items are presently estimated as follows, provided the framework of CDM is established.

• Determination of project implementation scope (scope of the modification) • Agreement on the work sharing in the project implementation scope • Agreement on the cost sharing in the project implementation scope • Agreement on the greenhouse gas production (base line) in the determined scope • Agreement on the reduction of the greenhouse gas production in the determined scope • Agreement on the monitoring methods and the monitors

2.4.2 Possibility of Approval as CDM Project At present, the Myanmar side has an organization under Foreign Ministry, called National Commission on Environmental Affairs (NCEA) to be in charge of the CDM-related matters. This organization also shoulders coordination between the Myanmar side and the Japan side. NCEA is in a position to instruct other ministries to conduct environment-related projects. It schemes to legislate for the right. If this law is enacted, the Ministry of Environment will be constructed based on the NCEA. They say that the Prime Minister, vice Prime Minister or another powerful person will be the Minister of Environment. At present, as described above, this project has to be discussed in NCEA and Energy Planning Department, checked by FAPC and then approved by the cabinet to conduct as a CDM project. It means that FAPC has to reach the common

2-101 consensus of the related ministries. Therefore it would take time for the Myanmar side to start this project. However, if the Ministry of Environment is organized, a powerful person will probably be the minister as mentioned above. The minister will be able to promote this project over the other ministries. Thus, if the Ministry of Environment actively promotes this project as CDM, it is easy to reach an agreement of it.

Myanmar has positively worked on environmental issues and has not carelessly lumbered rich forests to earn foreign currencies. If we successfully explain the importance of this project to improve the environment of such an environmentally sensitive country, we will have a very large possibility of reaching an agreement as CDM. We have already explained the worthiness of this project not only to NCEA, but also to Energy Planning Department and MPE and obtain their understandings. Taking the current situation into account, we can expect a positive result of the Myanmar side.

2-102 Chapter 3 Project Effect

In this chapter, the energy conservation effect, the greenhouse gases reduction effect and the productivity after the implementation of the project are described.

3.1 Energy Conservation Effect 3.1.1 Technical grounds of Energy Conservation Effect Since the existing facilities have deteriorated and the efficiency of the furnace as well as the heat exchanger is not satisfactory, the performance of heat recovery is unable to be estimated as optimal. It is possible to reduce the fuel oil remarkably through improving such performance of the heat recovery of the refinery as a whole by means of various measures described in Chapter2. Technological grounds why energy conservation effect occurs are set out below:

(1) Modification and/or replacement of furnaces and boiler It is possible to reduce the consumption of fuels via modifying and/or replacing the existing and deteriorated furnace of low heat efficiency. When newly manufacturing the furnace, energy conservation technologies including air preheater, oxygen control system, air-fuels ratio control system and draft control system are introduced to achieve improvement of the efficiency of the furnace. Finally, reduction of the consumption of fuels can be realized. The principles explaining improvement of the furnace efficiency are described as follows:

1) Air Preheater Most of waste heat from furnaces is radiated into the atmosphere in the form of the high-temperature flue gas. The air preheater, whose purpose is to conserve energy through recovering such waste heat, preheats the air for combustion utilizing this waste heat. In this case, since the heat source is the waste heat of flue gas, no fuels consume any more. Besides, because the air preheater preheats the air for combustion so far, heat input of the furnace increases. Therefore, reduction of the consumption of fuels can be achieved.

2) Oxygen control system and Air-fuels ratio control system The purpose of both systems is to minimize the air for combustion. When such air has been oversupplied, nitrogen and excessive oxygen contained therein are

3-1 passed through the furnace without contributing to the combustion, then, emitted in the form of the high-temperature waste gas. As a result, the more such air is supplied, the more loss of waste heat occurs, and it leads to the increase of the consumption of fuels. To prevent such event, both the control system for oxygen in flue gas and the air-fuels ratio control system control minimizing the air for combustion to the extent of ensuring stable combusting conditions. The former performs feedback control to make oxygen in flue gas optimized, and the latter sets the optimum volume of the air for combustion, damper opening in accordance with fuel supply.

3) Draft control system This system monitors and controls draft for the purpose of making oxygen / air- fuel ratio control systems fulfil their function in safety.

a) Replacement and/or addition of new heat exchangers / cleaning measures It is possible to reduce the fuel consumed in the furnace through improving the heat recovery by means of replacing the existing and deteriorated heat exchanger of low heat efficiency. Existing heat exchanger is unable to be cleaned fully due to insufficient maintenance equipment. Also many repairs with plugs for leaky tubes at their inlets and outlets have been carried out, which result in their lowered performance. Therefore, the heat recovery will be improved by replacing such deteriorated heat exchangers. Consequently, it is expected that energy conservation will be achieved through reducing fuels consumed in the furnace. The principles explaining improvement of the heat exchanger efficiency and the heat recovery are described as follows: •

• Replacement of Heat exchanger As mentioned above, since many heat exchangers have been repaired with plug, their heating areas become less than design figures. The performance of the heat exchanger depends on a (tube) surface area and heat-transfer- resistance under the same process conditions of a flow and a temperature. For this reason, in case the surface area is restored, it is possible to increase the performance of heat recovery. In fact, as the heat exchangers in the site concerned are fairly deteriorated, it is proposed to replace the heat exchanger including shells instead of partial repairs such as replacing tube bundles.

3-2 • Additional heat exchangers Newly establishing the heat exchangers makes the heat recovery increase owing to improvement of the heating area. It is possible to increase the heat recovery efficiently through adding new heat exchangers at the point where the fluid still have high residual heat level.

Cleaning measures for Heat exchanger Fouling of the heat exchanger become resistance to heat transfer which leads to the decrease of the heat recovery. As the countermeasures, it is proposed to carry out the 90° tube arrangement for cleaning the surface of tubes easily as well as a high-pressure jet cleaning car for cleaning the inside and outside of tubes during a periodical maintenance.

b) New power plant It is possible to reduce the fuel consumed via replacing the existing and deteriorated boiler and turbine generation (BTG) of low heat efficiency. Approximately 20 years have passed since the existing BTG was installed, and the following problems have been found so far:

• Shutdown due to trip a few times per year resulting from insufficient vacuum in condenser; • Decrease of the maximum power generating capacity from 6,000 kW to 4,000 kW; • Increase of the fuel consumption for the boiler.

Moreover, the overall heat efficiency of BTG has been found obviously decreased, approximately 45 % in measured data compared with 60 % in designed data, (see Table 2.2-25) Main reasons are considered as follows: •

• Insufficient vacuum due to decrease of cooling performance of the condenser; • Decrease of power conversion efficiency due to deterioration of the turbine itself; • Decrease of the efficiency of the boiler.

3-3 Regarding the measures, it is possible to reduce the consumption of fuels consequently in case of decreasing the loss of energy conversion, from fuels into steam and then into electricity, via replacement of the whole system. In this report, considering the serious superannuation of the whole equipment targeted, it is proposed to establish new BTG equipment with the same scale and to treat the existing one for standby system.

c) Recovery of the steam loss (leakage prevention) It is possible to reduce the consumption of fuels owing to decreasing the burden of the boiler through preventing measures for steam leakage in the deteriorated steam supply system, particularly, at the end thereof. As for such measures, it is possible to reduce leaking steam of approximately 4 ton/h through exchanging the broken steam trap, inspections and repairs of steam leaking points such as valve glands or otherwise. Therefore, it is possible to conserve energy through reducing fuels under decrease of the burden of the boiler.

d) Recovery of LPG and Off-Gas from COD-B and COD-C It is possible to reduce the fuel including natural gas consumed in the furnaces so far through separating and recovering a light hydrocarbons in the Off-Gas produced out of COD-B and COD-C and then combusting in the furnaces. In this case, however, since the fuel consumed in the furnace remains the same, it is not expected to obtain the carbon dioxide emission reduction.

3.1.2 Baseline for calculation of Energy Conservation Effect (1) Setting of baseline In case this project is not implemented, the baseline is set as the energy consumption at present under the conditions that the energy consumption in the refinery as a whole remains unchanged in the future. The extent of the calculation, the energy consumption as the baseline is fixed within the targeted equipment for modification for the purpose of energy conservation.

1) Grounds Crude oil refining capacity of Thanlyin refinery has been limited to 21,400 BPSD on average due to its actual refining capacity (see Table 2.2-23 in Section 2.2.4). On the other hand, every effort has been made to keep its maximum operating rate to satisfy the domestic needs of oil products in actual operation. As the

3-4 throughput of 21,400 BPSD will probably remain the same in the future, it is not expected that operating rate will influence the baseline with changing the energy consumption.

3-5 2) Baseline calculation Under the conditions that the maximum allowable operation rate (21,400 BPSD) of Thanlyin refinery remains unchanged, the fuel consumption is calculated for the equipment (modification item) targetedfor this Project. Such calculations are the summary based on the results estimated respectively in terms of each modification item listed in the “Project Contents at the Project Site (MPE) and Specification of the Modified Facilities' in Section 2.2.4.

a) Crude oil equivalence of the baseline To calculate the fuel consumption in the baseline, the calculating formulas as the premise are shown below:

LEV of fuel oil = 40.19 TJ/103 t-fuel oil (Source: Revised 1996 IPCC Guidelines for National Greenhouse Gas Inventories: Workbook) = 9,601 kcal/kg-fuel oil LHV of crude oil = 10,000 kcal/kg-crude oil

The figures mentioned above are applied to the calculation hereinafter as the common premise. The fuel consumption of the baseline is shown in Table 3.1-1. According to Table 3.1-1, the crude oil equivalence of the annual fuel input is estimated at 55,417 toe/y.

3-6 Table 3.1-1 Crude oil equivalence of fuel consumptionin each modification item Present Fuel Present Fuel Item Description Consumption Consumption (kcal/h) (toe/y) * A replacement of heat exchanger 11,191,000 (8,864) ofCOD-B B replacement of heat exchanger 6,461,840 (5,117) ofCOD-C C replacement of furnace 15,954,620 12,637 (H-101) ofCOD-B D modification of furnace 6,461,840 5,117 (FU-101) ofCOD-C E modification of furnace 0 0 (FU-501) of coker plant F establishment of new 45,922,000 36,370 power plant G recovery of steam loss 1,632,000 1,293

H modernization of cooling water 0 0 system J recovery of Off-Gas and 0 LPG from COD-B K recovery of Off-Gas and 0 LPG from COD-C L modernization of run-down 0 system for intermediate products

Total 69,970,460 55,417 *Present Annual Fuel Consumption; toe/y

= (Present Fuel Consumption; toe/h) X 24 X 330 -r 10,000 -r 1,000

Figures shown in parentheses in the table above, for the item A and B, are excluded from the total because they are included in the item C and D respectively.

(2) Summary of calculation Summary of the energy consumption annually and its accumulated volume for 30 years is summarized in Table 3.1-2.

3-7 Table 3.1-2 Summary of Project baseline Initial Year Last Year Year Energy Consumption "— Y 1st Y2nd - Y30th (Input) Y29 th Annually Energy Consumption Consumption Form: Crude Oil 55,417 55,417 55,417 Equivalence (toe/y) Accumulated Energy Consumption Total Consumption Form: Crude Oil 55,417 1,662,510 Equivalence (toe/y)

3.1.3 Actual Energy savings, Energy saving term and Cumulative Totals (1) Energy conservation effect As described above, it is possible to reduce the fuel consumption in the furnace through improvement of the furnace efficiency by modification/replacement of equipment, improvement of the heat recovery by optimum arrangement of the heat exchanger etc.

1) Crude oil equivalence of energy conservation effect Table 3.1-3 shows the crude oil equivalence of energy conservation effect by implementing each modification item. The annual reductions of crude oil equivalence of fuel are estimated at 25,844 toe/y according to Table 3.1-3.

3-8 Table 3.1-3 Crude oil equivalence of energy conservation effect in each modification item Fuel Fuel Fuel Item Description Consumption Consumption Reductions Present Post-project (kg/h) (kg/h) (toe/y) *1 A replacement of heat exchanger 1,165.6 1,059.2 809 ofCOD-B B replacement of heat exchanger 673.1 494.9 1,354 ofCOD-C C replacement of furnace 1,661.8 1,263.9 3,026 (H-101) ofCOD-B D modification of furnace 673.0 584.5 673 (FU-101) ofCOD-C E modification of furnace 0 0 0 (FU-501) of coker plant F establishment of new 4,783.0 3,470.6 9,979 power plant G recovery of steam loss 170.0 0 1,293

H modernization of cooling water 0 0 0 system J recovery of Off-Gas and Fuel reductions of the furnace LPG from COD-B 8,710 via Off-Gas recovery are K recovery of Off-Gas and *2 counted. LPG from COD-C L modernization of run-down 0 0 system for intermediate products

Total 9,126.5 6,873.1 25,844 * 1: Annual Fuel Reductions (toe/y) = (Present Fuel Consumption — Fuel Consumption after Energy Conservation)

X24 X 330 X 9,601 -r 10,000 -r 1,000 * 2 : Fuel Reductions (toe/y)

= (Off-Gas Recovery 470 Nm3/h) X (LHV of Off-Gas 23,408 kcal/Nm3) X 24 hr X 330 day -f 10,000 kcal/kg-Crude Oil -r 1,000

(2) Summary of calculation The effect obtained by implementing each modification item in terms of the energy consumption annually and accumulated value for 30 years is summarized in Table 3.1-4.

3-9 Table 3.1-4 Definite volume and accumulated volume of energy conservation effect Initial Year Last Year Year EnergyReductions Y 1st Y2nd- Y30Ul Y29 th Annually Energy Reduction Consumption Form: Crude Oil 25,844 25,844 25,844 Equivalence (toe/y)

Accumulated Energy Reduction Total Consumption Form: Crude Oil 25,844 775,320 Equivalence (toe/y)

3.1.4 Verification of Actual Energy Conservation Effect The energy conservation effect is achieved through replacing the furnace and the heat exchanger, establishing new BTG, decreasing burden of the boiler by reduction of steam leakage and otherwise. Such effect is confirmed by taking methods to compare and estimate the data of the fuel and steam consumption before and after implementation of the project. COD-B, COD-C and boiler utilize fuels including fuel gas (methane and ethane- rich fuel gas from the coker plant and natural gas) and/or fuel oil (coker gas oil and residual oil). Required information is to be confirmed under constantly recording the fuel consumption by flow meter at the inlet of furnaces and boiler as well as the oxygen content and temperature of the flue gas by proper instruments. Therefore, the relevant data before and after implementation of the project are compared for the purpose of confirming the definite energy saving effect. Concerning the steam leakage, such effect is confirmed in the same manner by estimating the volume of steam produced and the fuel consumption of the boiler under the same operating conditions of any facilities using the steam by means of each flow meter.

3-10 3.2 Greenhouse Gases Reduction Effect 3.2.1 Technical grounds of Greenhouse gases Reduction Effect The carbon dioxide emissions resulting from fuel combustion is reduced owing to reduction of the fuel consumption in the refinery by implementation of this project. Besides, the greenhouse gases reduction effect is also obtained through recovering unburned methane gas in the form of the Off-Gas radiating into the atmosphere and then converting the same into the carbon dioxide via combusting in the furnace. The carbon dioxide emissions newly produced in this manner is simultaneously offset by reducing the fuel consumed in the furnace

Technological grounds of greenhouse gases reduction effect are described as follows. The explanation of the reasons why the fuel and steam are reduced is referred to the technological grounds of energy conservation effect set out in Section 3.1.1.

(1) Modification and/or replacement of furnaces and boiler The carbon dioxide emissions are reduced by decrease of the fuel consumption via modifying and/or replacing the existing and deteriorated furnace of low heat efficiency.

(2) Replacement and/or addition of exchangers / cleaning measures The fuels consumed in the furnace are reduced by improvement of the heat recovery via replacing the existing and deteriorated heat exchangers of low heat efficiency. Therefore, the carbon dioxide emissions are also reduced.

(3) New power plant The fuels consumed are reduced by replacing the existing, deteriorated BTG of low heat efficiency. As a result, the carbon dioxide emissions are reduced as well.

(4) Recovery of steam loss (leakage prevention) The carbon dioxide emissions are reduced through decreasing the burden of the boiler and reducing the fuel consumption by means of preventing measures for steam leakage in the deteriorated steam system, particularly at the end of the piping.

3-11 (5) Recovery of Off-Gas loss (Utilization of Off-Gas as home fuel) When unburned Off-Gases (light hydrocarbon gas) radiating into the atmosphere so far are recovered and combusted in the furnace, methane contained in the Off- Gases is converted into the carbon dioxide with the relatively smaller global warming potentials. Consequently the Greenhouse gases are reduced by such measures.

3.2.2 Baseline for calculation of Greenhouse gases Reduction Effect (1) Settingof the baseline The baseline is set, supposing this project is not implemented, as the present greenhouse gases emissions remain unchanged hereafter, which are carbon dioxide emissions resulting from fuels consumed and methane emissions contained in the Off-Gas from crude oil. The extent estimated as the baseline is fixed within the equipment (modification item) targetedfor the modification.

1) Grounds Under the conditions that the operating rate of the refinery remains the same hereafter, it is regarded that such rate does not influence the basehne of the Greenhouse gasesemissions. Methane emissions rely on its content in the processed crude oil to some extent, Thanlyin refinery probably continues to process the same Malaysian oil (Tapis- Blend) hereafter owing to the refinery’s configuration. Then, it is regarded that methane emissions do not influence the basehne.

2) Baseline calculation a) Baseline of carbon dioxide emission The annual carbon dioxide emissions at present are calculated through the present crude oil equivalence of the fuel consumption per year listed in Table 3.1.1 under the following manner. The carbon dioxide emissions at present of each modification item are shown in Table 3.2-1. The annual carbon dioxide emissions at present are calculated at 171,472 t-C02/y accordingto Table 3.2-1.

3-12 Table 3.2-1 Present carbon dioxide emissions in each modification item Present Fuel Present C02 Item Description Consumption Emissions (toe/y) (t-COg/y) * A replacement of beat exchanger (8,864) (27,427) ofCOD-B B replacement of heat exchanger (5,117) (15,833) ofCOD-C C replacement of furnace 12,637 39,102 (H-101) ofCOD-B D modification of furnace 5,117 15,833 (FU-101) ofCOD-C E modification of furnace 0 0 (FU-501) of coker plant F establishment of new 36,370 112,536 power plant G recovery of steam loss 1,293 4,001

H modernization of cooling water 0 0 system J recovery of Off-Gas and 0 0 LPG from COD-B K recovery of Off-Gas and 0 0 LPG from COD-C L modernization of run-down 0 0 system for intermediate products

Total 55,417 171,472 *: Carbon Dioxide Emissions = a -r 1,000 XbXcXdXe (Details are mentioned below)

a : crude oil equivalence of fuel consumption (toe/y) b : conversion to energy unit (LHV :TJ) , coefficient of conversion: 42.62 TJ/kt c : carbon emission factor : 20 tC/TJ d : MW(COz)/MW(C) (44/12) e : fraction of carbon oxidized : 0.99

3-13 b) Baseline of methane emissions As methane contained in the feedstock (crude oil) is radiated into the atmosphere in course of refining in the form of the Off-Gas, the baseline is determined by quantifyingthe methane content of crude oil processed annually as follows:

Crude oil processed = 21,400 BPSD (=present processing capacity) Annual operating days= 330 days (= present operating days) Crude oil density = 0.7976 t/kl (=present type of crude oil: in-house data of Tapis-Blend) Global warming index of methane = 21 Methane content in crude oil = 0.024 wt%

(26.7 kg/h X 24 h) +(21,400 BPSD X 0.159 kl/BBL X 0.7976 X1000) X100 (Methane recovery estimated at 26.7 kg/h based on estimation of modification item-J and K, which converted into the content per weight of processed crude oil)

Present crude oil processed = 21,400 X 0.159 X 0.7976 X 330 = 895,592 t/y(l BBL = 0.159 kl)

Methane content of crude oil = 26.7 X 24 X 330-i-1000 = 211.464 t/y carbon dioxide equivalent emissions = 211.464X21 = 4,441 t-C02/y......

c) Baseline (total) ®+© = 171,472+4,441 = 175,913 t-COgy

(2) Summary of calculation The results mentioned above are summarized in Table 3.2-2.

3-14 Table 3.2-2 Summary of project baseline (Unit (C02 equivalence) :t/y) Year Initial Year Last Year Energy Consumption ~ Y 1st Y2nd -Y29 th Y30th o

p 171,472 171,472 171,472 Annually ch4 4,441 4,441 4,441

Total (t-COg/y) 175,913 175,913 175,913 o Accumulated p 171,472 5,144,160 Total ch4 4,441 133,230

Total (t-COg) 175,913 5,277,390

3.2.3 Actual Greenhouse Gases Reduction, Effective Term and Cumulative Reduction (1) Greenhouse gases reductions of the Project (Greenhouse gases reduction effect) 1) Greenhouse gasesreduction effect a) Carbon dioxide emission reduction effect In this Project, the carbon dioxide emissions resulting from the combustion of the fuel are reduced by decrease of the fuel consumption in the furnace.

b) Methane emission reduction effect In this Project, when unburned methane in the form of the Off-Gas radiating into the atmosphere is recovered and combusted in the furnace, the methane is converted into the carbon dioxide. Consequently, the Greenhouse gases reduction effect is obtained by such measures.

2) Calculation of Greenhouse gases emission reduction effect a) The carbon dioxide equivalence of emissions of the fuel consumption reduced are listed in Table 3.2-3.

3-15 Table 3.2-3 Present carbon dioxide emissions in each modification item Fuel Reductions C02 Emission Item Description (toe/y) Reductions (t-C02/y) A Replacement of heat exchanger 809 2,503 ofCOD-B B Replacement of heat exchanger 1,354 4,190 ofCOD-C C Replacement of furnace 3,026 9,363 (H-101) ofCOD-B D Modification of furnace 673 2,082 (FU-101) ofCOD-C E Modification of furnace 0 0 (FU-501) of coker plant F Establishment of new 9,979 30,877 power plant G Recovery of steam loss 1,293 4,001

H Modernization of cooling water 0 0 system J Recovery of Off-Gas and (8,710) LPG from COD-B converting effect 0 K Recovery of Off-Gas and only from LPG from COD-C purchased fuel to off-gas L Modernization of run-down 0 0 system for intermediate products

Total (25,844) 53,016 b) Methane emission reduction effect The methane equivalent to the baseline estimated in the manner mentioned previously is fully recovered, leading to zero. The Greenhouse gases reduction is estimated at 4,441 t-C02/y under the formula-© set forth in Section 3.2.2(1). The Greenhouse gases reduction effect is shown in Table 3.2-4.

3-16 Table 3.2-4 Greenhouse gases reduction effect in each modification item Construction Details Methane Recovery C02 Emission Item (kg/h) Reductions (t-CO,/y) * J recovery of Off-Gas and 19.2 3,194 LPG from COD-B K recovery of Off-Gas and 7.5 1,247 LPG from COD-C

Total 26.7 4,441 *: Annual Carbon Dioxide Emission Reductions = Methane Recovery X 24 X 330 X 21 -f 1,000

The calculations above are summarized in Table 3.2-5.

Table 3.2-5 Summary of Greenhouse gases reduction effect (Unit (C02 equivalence): t-C02/y) J £ c3

Initial Year Y 1st Y2nd-Y29 th CO o

Annual Total CO, 53,016 53,016 53,016 of Direct Effect ch4 4,441 4,441 4,441

Total (t-C02/y) 57,457 57,457 57,457 Accumulated co2 53,016 1,590,480 Total of Direct Effect ch4 4,441 133,230

Total (t-C02/y) 57,457 1,723,710

3-17 3.2.4 Verification of Actual Greenhouse Gases Reduction Effect (Monitoring) The Greenhouse gases reduction effect is concretely estimated through data by means of monitoring the fuel consumption and the methane recovery respectively. Such reduction is achieved via replacement and/or modification of the furnaces and the heat exchangers, establishment of the new power plant, reduction of steam leakage, methane recovery. Therefore, for confirming the Greenhouse gases reductions, it is adequate to monitor the fuel consumption, the steam consumption and the methane recovery after implementing the project. The fuel consumption in the furnaces is confirmed by measuring the consumption of fuel gas and the fuel oil with the flow meters at the inlet of the furnaces. The result is to be examined the same in comparison with the case before implementation of the project, as the same manner described in Section 3.1.4, in terms of energy conservation effect. Furthermore, the methane recovery is calculated by estimating the gas recovery via the flow meter set at the inlet of the Off-Gas recovery system installed in COD-B and COD-C respectively as well as sampling gas composition periodically and then analyzing the same by means of gas chromatograph. The concrete volume of the Greenhouse gasesreduction effect is converted into the carbon dioxide equivalence by using the formula of (Q=A-i-1000xBxCxDxE) set out in Table 3.2-1 as well as the formula of (carbon dioxide emission reductions = methane recovery X 24 X 330 X 21 -r 1,000) set out in Table 3.2-4.

3-18 3.3 Effect on production

When this project is implemented, the following effect on production is expected.

• Reduction of the fuel consumed in the furnace by the energy conservation effect • Increase of LPG production through LPG recovery. • Production of the fuel corresponding to the Off-Gas recovery.

The effect on the production after implementation of this project is described below:

3.3.1 Fuel reductions in furnace According to Table 3.1-1, the crude oil equivalence of the fuel consumption reduced by implementing this project is estimated at 25,844 toe/y. Converting such figures into each fuel respectively is shown in Table 3.3-1. In other words, it is possible to reduce such volume of fuels or convert the same into any other fuel annually. As a result, the flexibility in terms of its balance of production improves.

Table 3.3-1 Fuel reductions by implementation of project Volume LEV Remarks

Crude Oil 25,844 10,000 (toe/y) (kcal/kg) Heavy Oil 26,893 9,601 (foe/y) (kcal/kg) CGO 27,082 9,543 fuel oil used in Thanlyin refinery (t-CGO/y) (kcal/kg) Fuel Gas 23,358 11,064 fuel gas used in Thanlyin refinery (1000Nm3/y) (kcal/Nm3) Natural Gas 28,963 8,923 fuel gas used in Thanlyin refinery (1000Nm3/y) (kcal/Nm3)

3.3.2 LPG recovery The LPG recovery has been already estimated in the “Project Contents at the Project Site (MPE) and Specifications of the Modified Facilities” of Section 2.2.4.

3-19 Based on such estimation, LPG recovery is calculated at 1,200 kg/h, consisting of 1,117 kg/h from COD-B and 83 kg/h from COD-C. In addition, the annual recovery is estimated at 9,504 t/y under the formula (=1,200 kg/h X 24 h X 330 day -r 1,000). Since the domestic demand of LPG considerably rely on the import, it is possible to reduce such import equivalent to the aforementioned recovery or to increase the sales of the products to the same extent as well.

3.3.3 Increase of fuel production via recovery of Off-Gas (methane) The methane recovery has been already estimated in the “Project Contents at the Project Site (MPE) and Specifications of the Modified Facilities” of Section 2.2.4. Based on such estimation, off-gas recovery is calculated at 26.7 kg/h, consisting of 19.2 kg/h from COD-B and 7.5 kg/h from COD-C. Annual recovery is estimated at 211 t/y under the formula (=26.7 kg/h X 24 h X 330 day-r 1000). Converting such figures into other fuels is shown respectively in Table 3.3-2.

Table 3.3-2 Methane recovery via Off-Gas (methane) recovery project Volume LEV Remarks

Methane 211 11,954 (t-CHVy) (kcal/kg) Heavy Oil 263 9,601 (foe/y) (kcal/kg) CGO 264 9,543 fuel oil used in Thanlyin refinery (t-CGO/y) (kcal/kg) Fuel Gas 228 11,064 fuel gas used in Thanlyin refinery (1000Nm3/y) (kcal/Nm3) Natural Gas 283 8,923 fuel gas used in Thanlyin refinery (1000Nm3/y) (kcal/Nm3)

3-20 Table 4.1-1 The requisite conditions for investment return effects Initial investment 4,300 million yen (500 million yen by MPE’s self­ accommodation and 3,800 million yen by the select environment yen loan) Post-project costs Maintenance costs 86 million yen/year (necessary during 30 years that applicable techniques are valid) Interest payments 727 million yen/40 years (0.75% of the principal; 10-year deferred period for the principal) Energy saving effect 25,840toe/year (no change with passage of time) Other economic effects LPG production surplus 9,500ton/year (no change with passage of time) Energy prices LPG price (FOB) 22,500 yen/ton (immediately after the project, no change with passage of time) LNG price (GIF) 19,800 yen/ton (immediately after the project, no change with passage of time) Unit conversion ltoe = 10,000X 103kcal LNG lkg=13,000kcal

4.1.2 Post-Project Economic Effects Based on the above requisite conditions, the economic effects in the first year after the project are estimated as follows

(1) Cost-Saving Effects by Reduced Expenditure on Natural Gas The cost of natural gas equivalent to 25,840 toe/y can be saved due to the energy­ saving effects. Here, 19,877 ton/y of natural gas is cut according to the following expression:

25,840 X 10,000 X 10s (kcal/ton) / 13,000 X 103 (kcal/t) = 19,877 ton - LNG

In addition, if the price of natural gas, 19,800 yen/ton, is multiplied, the cost­ saving effect is 394 million yen/year.

(2) Increased-Income Effect by LPG Recovery Implementation of the project leads to the recovery of LPG at 9,500 ton/year. Here, by multiplying by the price of LPG, 22,500 yen/ton, the increased income effect is 214 million yen/year.

(3) Project Profitability Collectively the implementation of the project can yield the profit of 607 million yen/year. In the first year, no maintenance cost is necessary. Therefore, the project profit is 607 million yen. From the second year, the net profit is the above profit minus the maintenance costs of 78 million yen.

(4) Project Balance If the above prerequisite conditions, 3,800 million yen by accommodation with the special yen loan for environment, 10-year grace period, 40-year redemption term,

4-4 0.75 % interest rate and equal payment of the principal, are applied, the total payments during 40 years are 727 million yen. This amount is certainly needed so that it should be added to the initial investment to evaluate the project balance. Therefore, the project balance at the beginning of the first fiscal year after the project is 5,027 million yen in the red by summing the initial investment of 4,300 million yen and the total interest payments of 727 million yen. The effects of the project narrow the deficit by 607 million yen, and thus, the balance at the end of the first fiscal year is improved to 4,419 million yen (5027-607 million yen) in the red. The economic effects of the investment return in the followingyears are estimated as shown in Table 4.1-2.

Table 4.1-2 Economic effects of investment return ______(Unit: Million yen) 1st. 2nd. 3rd. 4th. 5th. 6th. 7th. 8th. 9th. 10th. year year year year year year year year year year 200X Initial investment -4,300 Total interest -727 payments Project balance at -5,027 -4,419 -3,898 -3,377 -2,855 -2,334 -1,813 -1,292 -770 -249 the beginningof the term Cost saving 394 394 394 394 394 394 394 394 394 394 effects Increased income 214 214 214 214 214 214 214 214 214 214 effect Maintenance 0 -86 -86 -86 -86 -86 -86 -86 -86 -86 costs Project profit 607 521 521 521 521 521 521 521 521 521 Project balance at -4,419 -3,898 -3,377 -2,855 -2,334 -1,813 -1,292 -770 -249 272 the end of the term

From Table 4.1-2, the cumulative project balance with 40-year interest payments based on the redemption plan for the special yen loan for environment moves into the black in the tenth year after the project. (The payout time is 9.48 years.)

4-5 the future, energy prices will rise Thus, this project also has the economic advantage.

4.2 Cost-Effectiveness in Project 4.2.1 Energy-Saving Effect This section discusses annual energy saving effect to the initial investment and overall energy saving to the entire project costs.

(1) Annual Energy-Saving Effect to the Initial Investment This project yields the energy saving effect of 25,840 toe/year to the initial investment of 4,300 million yen. Therefore, annual energy saving effect to the initial investment is as follows:

25,840(toe) / 4,300(milhon yen) = 6.01 (toe/million yen)

(2) Cost-to-Energy-Saving Effect in the Entire Project In addition to the initial investment of 4,300 million yen, this project needs the interest payments of 727 million yen after the project and the maintenance costs of 2,494 million yen (=86 million yen X 29 years), resulting in the total costs of 7,521 million yen. On the other hand, this project yields the energy saving effect of 775,200 toe ( = 25,840 X 30) during 30 years. Therefore, the cost-to-energy saving effect in the entire project is as follows:

775,200 (toe-y) / 7,521 (million yen-y) = 103.1 (toe/million yen)

4.2.2 Greenhouse Gas Reduction Effect This section discusses the greenhouse gas reducing effect to the initial investment in the first year and those to the entire project costs.

(1) Annual Greenhouse Gas Reduction Effect to the Initial Investment This project yields the greenhouse gas reduction effect of 57,450 t-C02/year to the initial investment of 4,300 million yen. Therefore, annual greenhouse gas reduction effect to the initial investment is as follows:

57,450 (t-COg) / 4,300 (million yen) = 13.4 (t-C02/milhon yen)

(2) Cost-to-Greenhouse Gas Reduction Effect in the Entire Project In addition to the initial investment of 4,300 million yen, this project needs the interest payments of 727 million yen after the project and the maintenance costs of 2,262 million yen (=86 million yen X 29 years), resulting in the total costs of 7,521 million yen. On the other hand, this project yields the greenhouse gas reducing effect of 1,73,500 t-C02 ( = 57,450 X 30) during 30 years. Therefore, the cost-to- greenhouse gas reduction effect in the entire project is as follows:

4-10 1,723,500 (t-C02-y) / 7,521 (million yen-y) = 229 (t-C02/million yen)

In other words, this equation shows the average cost of 4,364 yen (= 1 million yen /229 t-COg / million yen) needed to reduce carbon dioxide of 1 ton. After the currency exchange, this can be states as 39.0 $/t-C02. (If the initial investment only is paid, this is 2,495 yen/t-C02or 22.3 $/t-C02.) In fact, various projections to the price of dealings of C02 emission from 1,000 to 10,000 yen/ton-C02 have been proposed. Although such a projection depends on actually apphed rules of a CDM, this project can be very hopeful as a CDM project.

4-11 Chapter 5 Verification of Dissemination Effect

This chapter examines the possibility of the introduced technology dissemination within the targetcountry to other plants and industries and the effect this would have.

5.1 Possibility of the Technology Dissemination in Myanmar

The effect of technology introduced under a project such as the present one could be disseminated to the followingtwo refineries operated by MPE.

a) Thanbayakan Refinery (approx. 12-hour drive north of Yangon, Magway Division) b) Chauk Refinery (in northern Thanbayakan, Magway Division)

As the Thanbayakan Refinery's equipment is very similar to that of the Thanlyin Refinery it is believed that the same reduction of greenhouse gases emissions can be achieved. This would also contribute to solving the problems of air and environmental pollution in the surrounding area. In addition, the technology for improving heat recovery and heating furnace efficiency under consideration for this project has high universally. Technology dissemination could also be expected not only to the oil refining industry but also to other industrial areas such as the petrochemical industry and general industry in the future.

5.2 Total Effect Including Dissemination

The energy saving and greenhouse gases reduction effects at the Thanbayakan and Chauk Refineries are estimated based on a comparison with the throughput of the crude oil distillation units at the Thanlyin Refinery.

5.2.1 Energy saving effect The Thanbayakan and Chauk Refineries are used for refining Myanmar's domestic oil produced in the central inland area, but both operate at a low rate because of a lack of progress in developing domestic oil fields. The operation rates were therefore assumed to be 30 % at the Thanbayakan Refinery and 60 % at the Chauk Refinery based on their actual refinery output. Table 5.2-1 shows the

5-1 refilling capacity and actual throughput of crude distillation units of each refinery as well as the energy saving effect.

Table 5.2-1 Refining capacity, actual throughput, and energy saving effect Design Operation Actual Energy saving Refinery capacity rate throughput (BPSD) (%) (BPSD) (toe/y) Thanbayakan 25,000 30 7,500 19,422 Chauk 6,000 60 3,600 9,322 Total 31,000 35.8 11,100 28,744 (Thanlyin) (26,000) (82.3) (21,400) (55,417) (#1) (Note) : (#1) shows the energy saving effect in terms of crude oil at the Thanlyin Refinery.

5.2.2 Effect on reduction of greenhouse gas emissions The effect on the reduction of greenhouse gases emissions at the Thanbayakan and Chauk Refineries under the same conditions is shown in Table 5.2-2

Table 5.2-2 Effect on reduction of greenhouse gases emissions Refinery Reduction of greenhouse gases emissions (t-C02/y) Thanbayakan 20,137 Chauk 9,666 Total 29,803 (Thanlyin) (57,457)

5-2 Chapter 6 Impact of the Project on Environment, Economy and Society

This chapter discusses the impact which the project will have on the country's environment, economy and society in addition to its effect on energy conservation and reduction of greenhouse gasesemissions.

6.1 Environmental impact

The project's main objectives are to bring about reductions in fuel consumption and greenhouse gases emissions, but it offers the added potential of controlling air pollution by hydrocarbon vapors. As mentioned in section 2.2.2 (4), at present the offgas from the crude distillation units (including methane, ethane and LPG) is discharged into the atmosphere through independent high vents without combustion. Therefore, this project proposes work for recovery of offgas and LPG to reduce the emission of greenhouse gasses (methane). At the same time, it would be possible to recover methane and LPG discharged into the environment and thereby bring about a reduction in the emission of substances that cause air pollution.

6.2 Economic and social impact

The direct results of energy conservation would be, first, a reduction in the cost of fuel for refinery operation. And second result would be the possibility of selling the recovered LPG on the domestic market. Both factors combined would lead to an increase in revenue of Thanlyin Refinery (which could be used to repay yen loans). On the other hand, while the domestic LPG demand mainly for household use had been growing steadily from 1988 onward, growth has been stalled for the past few years due to limited domestic production (approx. 13,000 tons/year). That has acted as a restraint to improvements in the country's standard of living (see Figure 6.2-1).

- 6-1 - Conclusion

The present survey examined the possibility of implementing an energy conservation and modernization project at the Thanlyin Refinery and the feasibility of implementing it as a future CDM project. The government of Myanmar is not yet in a position to express its intentions from the angle of CDM, but they recognize the importance of the project for promoting progress in the energy industry which is the pillar of the country's sustainable economic development. As to petroleum products, the drop in domestic crude oil production to 3.5 million BBL/Y since 1984 and the outdated oil refining equipment, not designed for imported oil, have made Myanmar's per capita petroleum product supply by far the lowest in Southeast Asia. This also has acted as a hurdle to the healthy development of the country's economy. To break this deadlock, the government is keenly interested in building refineries that would be capable of refining low-priced crude oil from the Middle East in the future. But because of extremely tight foreign currency resources and the drying up of foreign aid to the country, chances of realizing these ambitions are faint. In this situation, the project proposed in this report also includes many elements which can be considered to be pre-investments for the first stage of the refineries the government hopes to establish. Realizing this, the government sees the needs to implement the project soon, and we plan to bring this about in cooperation with those involved on the Myanmar side. The people in Myanmar gave us their full support throughout the site survey arising from the high level of trust in Japan due to a number of yen-loan support for projects implemented up to the 1980s. They have strong desire to somehow bring life to the country's oil industry which has come to a dead end, as mentioned above. With the present survey completed successfully, the next step will be to aim at realization of the project based on the results of this feasibility study. To us it would be a source of great satisfaction if we were able to reward the untiring efforts of the Myanmar government officials, MPE and the people at the Thanlyin Refinery in assisting us with our survey by making this project a reality. 1. Site Survey Report

To carry out the present survey survey teams were sent to Myanmar on four occasions, including two visits to the refinery, where they performed a site survey and held consultations. The contents of these activities are outlined below.

1) First Survey Team Visit Dates : September 10 -15, 2000 Purpose : Preliminary consultations on site survey and collection of environment- related (especially CDM) information

Team members : Name Department Responsibility Kiyoshi Ishihara Project Dept. No. 2 Chief Researcher Engineering Supervisor Seishi Hatsuse Project Dept. No. 2 Project Planning (Energy Conservation) HitoshiYoshimura Overseas Project Development Dept. Project Planning (Financial Planning) Hajime Nakashima Overseas Project Development Dept. Project Planning (CDM)

Places visited : MPE Head Office, Thanlyin Refinery, EPD*1, NCEA*2 *1 : Energy Planning Department *2 : National Commission on Environmental Affairs

Results : • Briefed Myanmar officials involved (government, MPE) on the purpose of the Feasibility Study. • Reached agreement on the site survey. • Completed coordination of site survey schedule and survey method. • Inspected proposed sites. • Ascertained which government organization (NCEA) is in charge of environmental problems. • Discussed CDM with NCEA.

- 1 - 2) Second Survey Team Visit Dates : October 1 - 19, 2000 Purpose : Survey of project target site (Thanlyin Refinery) as to feasibility of the project

Team members : Name Department Responsibility Kiyoshi Ishihara Project Dept. No. 2 Chief Researcher EngineeringSupervisor Nagayuki Furuya Project Dept. No. 2 Assistant Chief Researcher (Production) Masaki Honjo Project Dept. No. 2 Project Planning (Process Design) Nozomi Odagiri Project Dept. No. 2 Project Planning (Process Design) Fumihiro Yamashita System Dept. Project Planning (Instrumentation and Electrical Design) Hajime Nakashima Overseas Project Development Dept. Project Planning (CDM)

Places visited : MPE Head Office, Thanlyin Refinery, EPD, NCEA

Results : • Collected data on design conditions of target equipment, operating conditions, energy conservation, etc. • Completed list of proposed project items. • Held consultations on proposed project items with the respective persons in charge. • Collected general statistical data on Myanmar. • Coordinated the schedule for the next consultations to be held in Myanmar and follow-up survey.

3) Third Survey Team Visit Dates : December 10 - 16, 2000 Purpose : Consultations in Myanmar on the results of the Feasibility Study and follow-up survey of project site

-2- Team members : Name Department Responsibility Kiyoshi Ishihara Project Dept. No. 2 Chief Researcher EngineeringSupervisor Masaki Honjo Project Dept. No. 2 Project Planning (Process Design) Nozomi Odagiri Project Dept. No. 2 Project Planning (Process Design) Yoshito Abe Project Dept. No. 2 Project Planning (Machinery and Structural Steel Design) Sakunobu Kanai Project Dept. No.2 Project Planning (Environment) Hajime Nakashima Overseas Project Development Dept. Project Planning (CDM)

Places visited : MPE Head Office, Thanlyin Refinery, EPD

Results : • Held consultations with the Myanmar side to discuss the results of their examination of the proposed project items. • Examined the items to be covered in the final report and their contents. • Collected detailed data and information for the Feasibility Study. • Coordinated the schedule for the next (final) consultation in Myanmar.

4) Fourth Survey Team Visit Dates : February 18 - 24, 2001 Team members : Name Department Responsibility Kiyoshi Ishihara Project Dept. No. 2 Chief Researcher Engineering Supervisor Nagayuki Furuya Project Dept. No. 2 Assistant Chief Researcher (Production) Hajime Nakashima Overseas Project Development Dept. Project Planning (CDM)

Places visited : MPE Head Office, EPD, Thanbayakan Refinery, etc.

Results : • Examined the items to be covered in the final report and their contents. • Held consultation to discuss the action plan for project implementation.

-3- • Made inspection tours of proposed target refineries for dissemination and collected data.

5) List of persons contacted a) MPE Head Office Name Title U Kyaw Shein Managing Director U Thang Myint Director Planning U Ngwe Director, Production b) Thanlyin Refinery Name Title U Aung Din General Manager U Khin Maung Shwe Dept. General Manager, Production U Pe Han Tun Dep. General Manager, Planning U Kan Tun Assist. General Manager U Myint Oo Mechanical Engineer Superintendent c) EPD Name Title U Soe Myint Director General U Them Lwin Dept. Director General U Soe Aung Director U Htin Aung Assistant Director d) NCEA Name Title U Kyi Tun JointSecretary (Director MOFA Economic Div.) Daw Yin Yin Lay Director, NCEA

-4- 2. Reference List

The literature sources referred to in this report and its attachments are listed below.

1) ARC Report - Myanmar, World Economic Information Service (1999) 2) Myanmar: Recent Economic Developments (1999 IMF) 3) Review of Financial, Economic and Social Conditions, Ministry of National Planning and Economic Development 4) Myanmar Energy Data, Ministry of Energy (Dec. 2000) 5) Energy Balances of Non-OECD Countries 1997-1998, IEA 6) Statistical Yearbook 1998, Myanmar Central Statistics Bureau 7) Operation data obtained from Thanlyin Refinery 8) IPCC Guidelines for National Greenhouse Gas Inventories Reference Manual 9) Petroleum Yearbooks, Petroleum Dept., Agency of Natural Resources and Energy Ministry of International Trade and Industry 10) Energy and Economic Statistical Handbook, Japan Energy and Economic Research Institute 11) World Energy Outlook 1998 Edition, OECD/IEA (2020 World Energy Outlook, translated and issued by Director's General Secretariat, Agency of Natural Resources and Energy, Ministry of International Trade and Industry)

-5- Any part or a whole of the report shall not be disclosed without prior consent of International Cooperation Center, NEDO.

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