OREANDA-NEWS. Nobel peace prize winner Aung San Suu Kyi will serve as energy minister in Myanmar's (Burma's) new government, underscoring the importance of the sector to the country's development.

Suu Kyi was appointed to head the energy ministry today as Myanmar swore in her ally Htin Kyaw as its first civilian president since 1962. The new government will take office on 1 April after Suu Kyi's National League for Democracy won a landslide victory in elections in November.

Myanmar's constitution bans Suu Kyi from the presidency because of her marriage to a foreign national. She has taken on oversight of the foreign affairs, education and president's office portfolios, and has indicated she will be the driving force behind the government despite being unable to serve as president, making it unclear how much day-to-day responsibility for the energy sector she will be able to take.

But the choice of energy ministry as one of Suu Kyi's formal roles indicates the new government sees investment into the sector as crucial to the country's future. Energy and electric power accounted for around 65pc of foreign direct investment into Myanmar under the outgoing government of president Thein Sein, who came to power in March 2011, according to the Myanmar Investment Commission.

Sanctions against Myanmar's military government blocked most US and European firms from the country for many years, before economic reforms and the release of Suu Kyi from house arrest in 2010 cleared the way for more investment. The EU has lifted most sanctions against the country, but Washington has kept some restrictions in place — and left many leading companies on its blacklist — complicating efforts by US companies to invest in the country.

Myanmar's largely unexplored offshore areas may hold significant reserves, particularly of natural gas. The government awarded blocks to Shell, ConocoPhillips, Total and other foreign energy firms in its first post-sanctions licensing round held in March 2014. Discoveries since then, notably by Australian independent Woodside, have added to interest in the sector, although the fall in oil and gas prices threatens to delay investment plans.

Myanmar produces around 1.2bn ft3/d (12.3bn m3/yr) of gas, most of which is exported to neighbouring Thailand. More gas is needed to fill the Burma Road pipeline that links the offshore Shwe fields to southwest China, but is operating at only around a third of its 12bn m?/yr capacity. A parallel oil pipeline was inaugurated last year but has yet to start operating because of delays to the 260,000 b/d Anning refinery in Yunnan operated by state-controlled PetroChina, which the pipelines will supply.

Years of underinvestment in the energy sector because of sanctions have left Myanmar critically short of the infrastructure needed to meet growing domestic demand. Shell is considering investing in a planned LNG receiving and regasification terminal at Dawei, near the border with Thailand, which could help meet some of Myanmar's short-term gas needs while its offshore reserves are developed. The government has been focusing on attracting investment into the power sector, mainly through gas-fired power plants, as it aims to increase electricity supply access to 50pc of its population by 2020 and 100pc by 2030, from just 20pc now.