China's CNPC starts building Myanmar oil pipeline
Released on - Wednesday,04 November , 2009 -08:57
China National Petroleum Corp (CNPC), the country's top oil producer, has kicked off construction of a pipeline across Myanmar that should give the Asian giant quicker access to oil supplies.
CNPC, parent of listed PetroChina, last week began work on a loading dock and oil tanks on Maday island in western Myanmar, the state-owned company said in a statement posted on its website Tuesday.
The 771-kilometre (480-mile) pipeline will connect Maday island and Ruili in the southwestern Chinese province of Yunnan, the statement said.
The pipeline is expected to carry 12 million tonnes of oil a year in the first phase, CNPC said without giving a timeframe for when it would become operational.
Energy-hungry China is Myanmar's sole major ally and trade partner, and an eager investor in the isolated state's sizeable natural resources.
Around 80 percent of China's oil imports, from areas such as the Middle East and Africa, are currently transported through the Malacca Strait, one of the busiest waterways in the world, according to earlier Chinese media reports.
The pipeline -- in the works for years -- would allow at least part of the Asian giant's crucial oil supplies to arrive without travelling through the strait, where pirates are known to operate.
It also would cut 1,200 kilometres off the current maritime delivery route, the reports said.
CNPC, which has made a total investment of around two billion dollars, would eventually be able to deliver 22 million tonnes of crude a year via the pipeline, Chinese media reports said.
CNPC is also planning to build a pipeline with an annual transportation capacity of 12 billion cubic metres (420 billion cubic feet) to move natural gas to the Yunnan provincial capital Kunming, by 2012.