In the pipeline:China is ready to begin the Burma link
China ready for crude link to Burma
China expects to start building a crude oil pipeline this year linking its southwestern Yunnan province with a deepwater port in neighbouring Burma, local media said over the weekend, quoting top refiner Sinopec.
China also plans to invest 8 billion yuan (US$1.04 billion) in a 2380-kilometre gas pipeline between the two countries, despite uncertainty about who will get the gas from some of Burma's largest offshore deposits, the country’s official news agency Xinhua said.
South Korea's Daewoo International Corporation operates Burma's large A-1 and A-3 natural gas fields, which have been the subject of a geopolitical tug-of-war between nearby China, India and Thailand as well as potential liquefied natural gas buyers South Korea and Japan.
An energy official from Burma told Reuters in December that the country had delayed a decision on what to do with gas from the two offshore blocks, pending findings from new appraisal wells to be completed by May.
However, an official from Seoul's energy ministry said in March that Burma had committed its gas to China as Beijing had agreed to build pipelines for free, with only price negotiations yet to be finalised.
Daewoo shot down the report, while China's state-run China National Petroleum Corporation (CNPC) also denied knowledge of any discussion or agreement that it would build gas pipelines for Burma without any charges.
China’s National Development and Reform Commission approved the crude pipeline at the start of April, Xinhua said, without detailing how large capacity would be or when work might be completed.
It will carry oil from Sittwe in Burma to Kunming, capital of Yunnan province.
Neighbouring Chongqing municipality is lobbying to have the pipeline extended to supply feedstock for a planned new refinery.
The pipeline would help supply crude to one of China's more remote areas and allow importers to bypass the packed and piracy-infested waters of the Malacca Straits, one of the world's busiest shipping channels.
The pipeline also reflects a growing energy relationship between China and its isolated neighbour, as Beijing scours the globe for resources to fuel its booming economy.
Its three energy majors - Sinopec, CNPC and China National Offshore Oil Corporation (CNOOC) - have all stepped up work in Burma and have a total exploration acreage larger than that in the country's own Bohai sea, Xinhua quoted Han Jingkuan, deputy director of the planning institute of PetroChina, as saying.