Backdrop: Rangoon, the capital of Burma
China starts building Burma pipeline
China's CNPC started building a crude port in Burma on 31 October, the China Petroleum Daily reported today, part of a pipeline project aimed at cutting out the long detour oil cargoes take through the congested Malacca Strait.
The reported commencement of construction took place at least a month later than scheduled in earlier plans reported by China's state media.
The port on Maday Island, Kyaukphyu Township in Burma's Rakhine state was the starting point for the 771-kilometre pipeline that would have a capacity of 12 million tonnes per year or 240,000 barrels per day in its first phase, the report said.
It did not say when the port facility would be ready for use or when the pipeline would be built.
CNPC also plans a gas pipeline from Burma with capacity of 12 billion cubic metres a year, scheduled to carry natural gas to south-western China in 2012.
Burma activists have called for China to halt construction of the controversial pipelines, warning of instability and civil unrest if Myanmar's ruling junta continues to starve its people of energy.
CNPC, China's largest oil and gas producer, operates most of its domestic businesses via listed PetroChina, while keeping politically-sensitive overseas businesses in its own hand.
China, the world's second-largest oil user, has been keen to diversify its oil import routes, concerned about supply security. Around three quarters of China's oil imports in 2008 were from the Middle East and Africa and most cargos were shipped through the pirate-laden Malacca Strait.
A crude pipeline with an initial capacity of 200,000 bpd started sending oil from Kazakhstan to China's north-west in 2006. A second transnational oil pipeline with a capacity of 300,000 bpd is under construction and expected to pump oil from Russia to northeastern China from late 2010, reported Reuters.