China teams up with Burma (above): to build cross border oil and gas pipelines
China and Burma sew up pipe deal
China said today that it had signed a contract with Burma to build cross boarder oil and gas pipelines, a move which will enable energy-thirsty Beijing to slash the journey time for crude imports.
China and Burma also signed an agreement to work together to develop hydropower projects, according to a brief statement published on the Chinese central government website.
It didn't provide details.
A senior energy official said yesterday that China was working with Burma to build an over 2000 kilometre gas and oil pipeline running through Ruili and Kunming in Yunnan province, Guizhou province to Chongqing municipality in south-western China.
The line would help China cut out oil cargoes' long detour through the congested Malacca Strait as well as strengthen China's access to rich energy reserves in Burma itself.
State media has reported that Yunnan is to start construction of the pipelines in the first half as part of its 72 billion yuan ($10.55 billion) worth of energy projects this year.
Few Western companies will invest in Burma because of its poor human rights record and continued detention of Nobel Peace Prize laureate Aung San Suu Kyi, which has led to a broad range of US and European sanctions.
China, typically wary of supporting or imposing sanctions and one of Burma's few diplomatic allies, has shown no qualms about investing in its south-western neighbour, coveting its natural gas, oil, minerals and timber.
Top Chinese officials have said that Beijing will encourage its energy companies to make more forays abroad to ensure the country's energy security, an even more important strategy than exploration at home.
Beijing also offered incentives such as cheap loans and tax breaks to energy companies to fund their foreign exploration, reported Reuters.