* CNPC plans dozens of gas stations in Myanmar's main cities
* First petrol station done under Singapore's SPC brand
* Part of strategy to tap retail profits outside China
* Myanmar is fastest-growing economy in Southeast Asia -ADB
By Chen Aizhu and Poppy McPherson
SINGAPORE/YANGON, May 20 (Reuters) - China NationalPetroleum Corp is planning to open dozens of petrol stations inMyanmar, the first major foreign investor to enter thefast-growing Southeast Asian fuel market, as the state giantexpands its retail oil business, company officials said.
The investment, which could eventually reach tens ofmillions of dollars, follows a new strategy to tap overseasretail margins as China's domestic fuel market is saturated. Themove follows a similar but larger investment in Brazil, whereCNPC's global trading and refining unit bought 30% of a leadingBrazilian fuel dealer last year. https://reut.rs/2JrkQqw
CNPC's external retailing push came after Tian Jinghui, aveteran fuel marketing executive took the helm at the globalunit, PetroChina International, which is also handling theMyanmar investment. https://reut.rs/2Yh0d4h
CNPC sees Myanmar as a prime frontier market for fuelretailing, where foreign participation is minimal but demand isgrowing at about 10% annually on a fast-expanding vehicle fleetand barely existent local refining industry.
"Myanmar is one of the few markets in this region that'sopen to outside investment and where demand is growing fast,"said a Beijing-based PetroChina executive with direct knowledgeof the investment. Officials declined to be named because theyare not authorized to speak to press.
Myanmar is the fastest-growing economy in Southeast Asia,with the Asian Development Bank (ADB) forecasting growth of 6.8%next year.
Myanmar's removal of fuel subsidies in 2007 and opening ofthe market to private investors has seen the number of petrolstations increase 10-fold over the past decade to more than2,000, said PetroChina officials and a Yangon-based analyst.
Already the largest investor in Myanmar's energy sector,operating pipelines that transport oil and gas from a deliverypoint on Myanmar's western coast to China's southwest, CNPC hasoutrivaled its global peers for a foothold in the market.
Jeremy Mullins, country director at Vriens and Partners, aSoutheast Asia-focused advisory firm, said challenges likeobtaining land and establishing a secure distribution system todeliver fuel that hasn't been tampered with have limited foreigninvestment in Myanmar's retail oil sector.
CNPC's "investment can be seen as a vote of confidence inthe market's potential (in Myanmar)," said Mullins.
OTHER MARKETS, OTHER INVESTORS
While CNPC is still hunting for targets elsewhere in Asia,the officials said foreign investment in fuel retailing isprohibited either by subsidized pricing as in Indonesia or by agrowing domestic refining industry as in Vietnam.
Others with a presence in Myanmar have not yet made anysignificant progress in its retail fuel sector.
Singapore's Hin Leong Trading has long been Myanmar's mainfuel supplier, according to one of the PetroChina officials anda Hin Leong executive. The trader is now exploring opportunitiesto enter fuel retailing in Myanmar with a local partner, said aHin Leong spokeswoman, without elaborating.Oil major Royal Dutch Shell is reviewing an earlierbrand licensing agreement with local fuel distributor Max EnergyPte Ltd, due to "current depressed fuels margins and capitalpressures", said a Shell spokeswoman.
Puma Energy, controlled by Swiss trader Trafigura, alsoplanned to enter the retail business in Myanmar after opening anoil products terminal and storage facility in May 2017. https://reut.rs/2JNfF47
But it's not clear if anything has materialised, and aspokeswoman for Puma Myanmar declined to comment.
WEARING THE SINGAPORE BRAND
CNPC is planning "several dozen" petrol stations to startwith in Yangon, Mandalay and capital Naypyidaw, under alonger-term goal of setting up hundreds of outlets in Myanmar,said the PetroChina executive, without giving a timeline.
Instead of using its PetroChina brand,which has thousands of petrol outlets in China, CNPC's firstfuel station in Myanmar bears the bright red logo of itswholly-owned unit Singapore Petroleum Company (SPC), aSingapore-based refinery that CNPC acquired in 2009.
"The SPC logo is used as it's one of the top brands inSoutheast Asia," said a second PetroChina official.
This is the first venture for the SPC brand outside ofSingapore, where it is the fourth-largest retail fueldistributor, another PetroChina executive said.
The station, opened in March in downtown Yangon, is a jointventure with privately owned Myanmar conglomerate Shwe Taung.
Shwe Taung's focus now is upgrading and rebranding 18stations in conjunction with SPC, a spokeswoman said. Furtherinvestment would depend on market conditions, she said.
SPC's 290,000 barrels-per-day refinery in Singapore suppliesroughly one million tonnes a year of fuel to Myanmar, mostly asgasoline and diesel, said the PetroChina officials.(Reporting by Chen Aizhu in SINGAPORE and Poppy McPherson inYANGON; Editing by Tom Hogue)
