Deal signals energy security | Shanghai Daily

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December 22, 2009

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Deal signals energy security

CHINA National Petroleum Corp, the country's largest oil and gas producer, said yesterday it has secured exclusive rights to build and operate the China-Myanmar crude oil pipeline.

In a statement on its Website, CNPC said it signed the deal with Myanmar's Energy Ministry to grant the operating concession to CNPC controlled Southeast Asia Crude Oil Pipeline Co. The Myanmar government will guarantee the safety of the pipeline, which will pipe crude to China through Myanmar's territory, as well as CNPC's ownership and exclusive rights, according to the statement.

The Myanmar deal signaled China's aim to improve its energy security by diversifying its oil import routes because about 75 percent of its crude imports from areas such as Middle East and Africa now pass through the crowded and pirate-infested Strait of Malacca between Malaysia and Indonesia.

The Myanmar oil pipeline would cut out the long sea journey and allow China to secure oil supplies by land. The 771-kilometer pipeline, connecting western Myanmar's Maday Island and southwestern China's Yunnan Province, is expected to carry 12 million tons of oil a year in the first phase and eventually 22 million tons of crude annually, domestic media reported.

In late October, CNPC started building a crude oil port in Myanmar as part of the China-Myanmar Crude Pipeline project.




 

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