Factbox: Pipelines from Myanmar to China

News - National Source > Reuters Thursday, 04 February 2010 20:56

PDF | Print | E-mail

(Reuters) - China will soon start receiving oil and gas through two controversial pipelines which run through military-ruled Myanmar.

Here are some facts about the pipelines:

WHAT THE PIPELINES WILL CARRY

One pipeline will carry oil from the Middle East and Africa, which will be offloaded from tankers at a Myanmar port and then piped into China, so avoiding the narrow Malacca Strait.

It will take 12 million metric tons of crude oil a year into China, roughly 6 percent of China's total imports last year, or about as much as the country imported from Sudan, its fifth largest supplier. There is no exact date for its opening yet.

The other pipeline will have capacity to bring 12 billion cubic meters of Myanmar gas every year into China, and is expected to come online within the next two years.

WHERE THE PIPELINES WILL BE LAID THROUGH

Both pipelines will start from the Myanmar port of Kyauk Phyu in the western state of Rakhine (also known as Arakan), then head in a northeasterly direction toward the city of Mandalay before arriving in the Chinese border town of Ruili in southwestern Yunnan province.

From there the pipelines go to Yunnan provincial capital Kunming and eventually on to the cities of Chongqing and Nanning.

WHICH COMPANIES ARE INVOLVED

CNPC, China's top oil and gas producer, is the main Chinese firm involved in the project. The firm does much of its business via listed PetroChina (601857.SS)(0857.HK)(PTR.N), while keeping politically-sensitive overseas operations in its own hand.

PetroChina is at an early stage of planning a 200,000 barrels-per-day refinery in Kunming to process oil from the Myanmar pipeline.

State-run Gail India (GAIL.BO) will pick up a 4 percent stake and Oil and Natural Gas Corp (ONGC) (ONGC.BO), will take another 8-8.5 percent, Indian media reported last month.

Other partners in the blocks, operated by South Korea's Daewoo International (047050.KS), are Myanmar Oil & Gas Enterprise, and Korea Gas Corp (036460.KS).

THE COST OF THE PROJECTS AND PROJECTED REVENUES

The Shwe Gas Movement, which is campaigning against the pipelines, estimates the total cost of the oil and gas pipes at $3.5 billion. The development of the offshore fields for the gas component will cost more than $3 billion.

But sales of the gas alone will generate more than $29 billion for the Myanmar government over the next three decades, they say, an important source of income for the sanctions-hit government.

WHY THE PIPELINES ARE CONTROVERSIAL

Rights groups say the people of Myanmar will see little of the money from the pipelines, with profits likely filtered away by the military government for their own purposes, like buying arms.

Myanmar, one of the poorest countries in the world, suffers from serious energy shortages of its own.

Rights groups also point to land confiscations to make way for the pipelines, and worry that the Myanmar military will resort to forced labor to construct the pipelines, as it has done in the past for similar projects.

Sources: Chinese state media, Shwe Gas Movement (www.shwe.org), Human Rights Watch.

(Writing by Ben Blanchard and Chen Aizhu; editing by Emma Graham-Harrison and Sanjeev Miglani)

Original source: http://www.reuters.com/article/idUSTRE6120MQ20100203