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17 June 2009

China starts building energy pipeline to Myanmar

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China begins lying a gigantic 1,100 km long gas and oil pipeline to Myanmar in September, an India daily quoted the Myanmar official media as reporting a day before the visit of Burmese leaders Wednesday.

It will cut transportation costs by shortening the journey for crude from the Middle East and Africa, the Times of India quoted the New light of Myanmar as reporting.

The move has serious strategic and political implications for both India and China, which has vetoed every United Nations resolution against Myanmar. It comes soon after China beat India in winning a 30-year concession from Yangoon's military junta besides launching construction of hydroelectric dams in that country.

The announcement was made in the official media immediately before Myanmar’s Vice Senior General Maung Aye left Nay Pyi Taw. The second ranking military ruler of Myanmar was scheduled to land in Beijing on a six-day visit on Tuesday.

The visit follows Myammar prime minister's General Thein Sein meeting with Chinese premier Wen Jiabao last April when the two discussed issues of cooperation in oil, gas and other economic areas.

"The section of the pipelines in Myanmar will be built under the name of CNPC but whether CNPC or PetroChina undertakes the construction of the domestic section has not been decided," the official China Securities Journal reported.

The Xinhua news agency said the oil pipeline can reduce the transport route by 1,200 km as compared to ocean shipping besides reducing China's reliance on the risky Straits of Malacca for oil import.

China will reassure Myanmar about its continued support in fending off criticism and economic sanctions on the issue of human rights, sources said.

The proposed pipeline will add to the network of land transportation that China is building. It set up a Sino-Kazakhstan oil pipeline in 2006 and is working on opening a new pipeline route with Russia by 2010 end.

Beijing signed the deal with Myanmar last March when it was decided that the two pipelines for gas and oil would run parallel. The pipelines will start in Kyaukpyu port on the west coast of Myanmar and enter China at the border city of Ruili in China's Yunnan province, sources said.

It will transfer 20 million tonnes of crude oil to China from the Middle East and Africa annually. The natural gas pipeline will be extended by an additional 1,700 kms to transport it from Yunnan to Guizhou and Guangxi Zhuang provinces to move 12 billion cubic meters of gas.


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