China’s Oil Pipeline Through Myanmar Brings Energy—and Resentment – Businessweek

Until recently, 80 percent of China’s oil and gas imports were transported by ship through a narrow waterway separating Indonesia and Malaysia, known as the Strait of Malacca. The possibility that hostile forces could one day block that crucial passageway and starve the country of energy has long made China’s leaders nervous.

Oil and gas pipeline

Oil and gas pipeline (Photo credit: Wikipedia)

In 2009, two state-owned energy giants inked a $2.5 billion agreement to loosen the pinch: China National Petroleum and Myanmar Oil & Gas Enterprise agreed to lay down more than 500 miles of oil and gas pipelines from Myanmar’s western coast to China’s southwestern Yunnan province. When the oil pipeline goes online later this year, tankers carrying crude from the Middle East and Africa will be able to dock at Myanmar’s port of Kyaukpyu and send as many as 440,000 barrels of oil a day overland to China. Industry news service Platts (MHFI) reports that the oil pipeline is 75 percent complete and should be operational by June.

A parallel gas pipeline went into operation last July, capable of transporting as much as 12 billion cubic meters of natural gas per year across Myanmar to China. “China’s piped gas is mainly imported from areas around the Malacca Strait,” Lin Boqiang, a professor with the China Center for Energy Economics Research at Xiamen University, told the state-run Global Times. “Now we have one more pipeline from the land instead of the seabed, which will decrease” China’s energy vulnerability.

via China’s Oil Pipeline Through Myanmar Brings Energy—and Resentment – Businessweek.

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