China opens pipeline for gas from Myanmar

Written by Press Trust of India | Beijing | Updated: Jul 30 2013, 20:22pm hrs
Energy-hungry China has started receiving natural gas from Myanmar through an 870-km strategic cross-border pipeline co-invested by four countries, including India.

The multi-billion dollar pipeline, that was inaugurated in northern Myanmar's Mandalay yesterday, will ship natural gas and petroleum all the way from the coastal port in Myanmar to China's Southwest Yunnan Province.

The gas pipeline, co-invested by six parties from four countries including India and South Korea, has a designed annual throughput of 12 billion cubic meters before off-loading in Myanmar.

A parallel oil pipeline is also part of the project. China National Petroleum Corporation (CNPN) is a major partner in both assets.

The designed annual capacity is 22 million tonnes for the oil pipeline and 12 billion cubic metres for the gas pipeline.

The cost of the pipeline was in billions, state-run Xinhua news agency reported, without mentioning the exact investment in the project.

It shortens the distance of transportation originally going through the Malacca Strait, a Chinese expert said.

Petroleum and gas would be shipped from West Asia to Myanmar and from there it would be pumped to China through the pipeline.

The pipeline has started to deliver gas to China, official media here reported.

Experts estimate that the pipelines will satisfy a quarter of China's natural gas demand every year, and also bring about $1.5 billion to Myanmar each year, creating a win-win co-operation between the two countries, state media reported.

In an editorial on Monday, the state-run Global Times newspaper said: "This is another breakthrough in China's strategy of energy diversification and has obvious significance in reducing China's dependence on the Strait of Malacca for the import of oil and natural gas."

After the completion and commissioning of the whole project, two million tonnes of crude oil and 20% of the designed throughput of gas will be off-loaded in Myanmar, which will be helpful to promote Myanmar's economic development and people's living standards.

Two joint ventures South-East Asia Crude Oil Pipeline Company and South-East Asia Gas Pipeline Company were registered and established with investment from all parties to respectively take charge of operation of the two pipelines.