NAYPYITAW, Nov 7 (Reuters) - Big hydropower dams are not a priority in Myanmar's strategy to tackle chronic power shortages, the country's new energy minister said in an interview that cast doubt over a controversial China-backed project in the country's north.
Already the construction minister, Win Khaing has overhauled the poor Southeast Asian country's power strategy since being given the additional brief for electricity and energy in August.
The de facto leader of Myanmar's civilian government Aung San Suu Kyi chose Win Khaing to help fix crumbling road and electricity networks, as part of a mission to create jobs in an economy that has slowed to a still creditable 6.5 percent growth.
In his first interview with international media since the reshuffle, Win Khaing told Reuters on Monday he favored imports of liquefied natural gas and small-scale hydropower projects as part of the solution to keeping the lights on.
Despite the diplomatic support China has given Myanmar, helping to prevent a U.N. Security Council resolution on what top U.N. officials have said is "ethnic cleansing" of Rohingya Muslims by Myanmar's armed forces, Win Khaing seemed in no rush to push through a mega-dam project for a Chinese state-run firm.
Valued at $3.6 billion, the Myitsone dam project has been a sticking point between the two countries since the former military-backed government suspended work in 2011.
Reuters reported in April that officials in China and Myanmar were discussing alternative options that would allow Myanmar to scrap the massive project amid environmental concerns.
The proposed dam, on the upper reaches of the Ayeyarwady river in Kachin state, would have sent most of its power across the border to China's Yunnan province, which now has an oversupply of electricity as it switches to less energy-intensive industries amid an economic slowdown.
"Sometimes things change. Now China is overflowing with energy they don't need power right now," said Win Khaing. "Actually they have a surplus of power right now, especially from hydropower. What was very, very important 10 years ago has different perspectives right now."
A government panel set up in August 2016 was still reviewing the dam, he said, adding the government was in dialog with the Chinese operator, State Power Investment Corp subsidiary Yunnan International Power Investment.
The panel had not met since August, when it submitted a second report to Myanmar's President Htin Kyaw, according to a source with direct knowledge of the matter.
The unpublished report did not reach a conclusion on whether to go ahead with the dam, the source said.
Win Khaing said large hydropower projects could be "good for the future," but for now he was focused on completing several smaller projects already underway and wanted to develop ways to preserve water above existing dams in the country's dry seasons.
"Up to 2025, we don't put (large dams) in our plan. They have to be considered later on. But right now ... I don't need to have issues with environmental or political problems. I need just to have power."
He said China could be involved in other parts of Myanmar's plans to overcome shortages that see major cities frequently rationing power during the hot season.
The government was in talks with "some huge LNG providers" about supply contracts, he said, explaining that Myanmar faced a shortage of gas in about five years as production at several offshore fields winds down.
"For the first time, our government has decided to use LNG as one of our base load (power sources). But it involves setting up expensive LNG terminals, also de-gasification plants in some areas, some pipelines are necessary," said Win Khaing.
The new minister declined to say specifically what the new planned energy mix would look like. Despite environmental concerns, he said coal would be part of plans that would be "balanced between the natural gas and the hydropower." (Additional reporting from Yimou Lee in YANGON; Editing by Simon Cameron-Moore and David Evans)