Myanmar's oil and gas pipelines
Published on 22/04/2015
The opening of the Sino-Burmese pipelines running from the Bay of Bengal in the Indian Ocean, through Myanmar and on to some of Asia's major growth centres has required China to overcome major political and technology challenges. But why did the Chinese government deem it necessary to take such extreme steps?
Background - problems in the Strait of Malacca
China's decision to build and operate the pipes stems from problems with the notorious, pirate-infested waters of the Strait of Malacca - a 900 km sea lane between Malaysia and Indonesia. The Strait lies on the busy route between Europe, the Suez Canal, the oil exporters of the Middle East and the port cities of East Asia.
It is an ideal hunting ground for pirates due to its geography, which comprises thousands of islets and numerous river mouths, providing countless hiding places that make policing the area a major challenge.
Oil represents a prized target for pirates. Between April and July 2014, at least six oil tankers were successfully attacked.
The pipelines through Myanmar bypass the Strait entirely, reducing the distance that the oil and gas must be transported oversea by more than 1,100 km.
Avoiding the Strait of Malacca carries another significant benefit. Previously, four-fifths of China's hydrocarbon imports were transported via this sea route, making the country susceptible to a potential naval blockade in the event of a political fallout between China and the US.
The routes are broadly similar, with the pipelines running parallel across Myanmar from the port of Kyaukpyu to the Chinese border crossing at Ruili. However, the two pipes differ in their endpoints.
- Oil: Runs 771 km from a new deepwater port at Maday Island to Kunming, the capital of Yunnan province in south-east China.
- Gas: Beginning at the sea port of Kyaukpyu, this 2,800 km pipeline extends beyond Kunming to the province of Guizhou and the autonomous region of Guangxi.
Ownership and cost of construction
The key infrastructure involved in this project is controlled by the state-owned China National Petroleum Company, which stumped up the full $2.5 billion cost of the link.
Construction of the Myanmar section of the natural gas pipeline, which is dedicated to transporting methane, was completed in June 2013. It has already been used to carry four billion cubic metres of the gas to China.
Work on the oil pipeline was finished in August 2014, with China announcing the opening of the link in late January 2015. To mark the occasion, a 300,000 ton supertanker discharged its cargo at the Maday Island port. The pipe has a designed transmission capacity of 22 million tons per year.
The construction and opening of the pipes will provide China with substantial benefits, but the project has been littered with challenges.
Not least of these are the locations through which the pipes run. The route takes in some of the most treacherous terrain on the planet, comprising dense jungle and jagged peaks. What's more, it encroaches on two states - Rakhine and Shan - that are among the biggest political flashpoints in all of south-east Asia.
Unsurprisingly, China's plans have caused significant controversy. Protest group the Shwe Gas Movement repeatedly called for the project to be abandoned, citing several human rights abuses during the construction - including confiscation of land, environmental damage and poor labour practices.
"We cannot let this project set a bad example for future investors," said Wong Aung, coordinator of the Shwe Gas Movement. "Only when we have ensured equal benefits and humane conditions can development proceed without conflict."