Myanmar-China Oil Pipeline Set to Commence Pumping in May
By Dezan Shira & Associates
Posted: 31st January 2013 09:42China National Petroleum Corporation (CNPC) stated that the long awaited Myanmar-China oil and gas pipelines should be operational by May of this year. The 1,100 kilometer pipeline stretches from Kyaukpyu Port on Myanmar’s central west coast, crosses the country from west to east and terminates at Ruili, near Kunming, in Yunnan Province.
The pipeline contains two feeder pipes: one containing oil shipped to Kyaukpyu from the Middle East and Africa across the Indian Ocean, and the other containing gas from the Shwe gas fields in the Bay of Bengal. The oil route negates the need for China to send shipments through the Straits of Malacca.
Some 22 million tons of oil and 12 billion cubic meters of gas are expected to transit via the pipeline each year. The entire project cost US$2.5 billion and was financed by China. The Myanmar government charge transportation levies for the commodities crossing their land.
However, there are some dissenting voices in the Myanmar government who are set to challenge some of these tariffs and demand higher rates for compensation for environmental damage. The Myanmar government has had an uneasy relationship with Chinese investments recently, and will be keen to prove it can stand up to its neighbor and demonstrate it will listen to the concerns of its citizens.
The two government officials who announced the news – Myanmar’s President Thein Sen, and China’s Vice Foreign Minister Fu Ying – stressed the “mutual cooperation” between the two countries. However, the question as to how much leverage Myanmar can exert over China in terms of the pipeline traversing Myanmar soil will remain an interesting foreign and political balancing act to watch in the forthcoming years.
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