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NewsBase reports on China-Myanmar oil pipeline

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World Pipelines,

According to NewsBase, Myanmar is reportedly responsible for delaying the operational startup of the China-Myanmar pipeline, which would transfer crude oil through the country to China.

Built by China National Petroleum Corp. (CNPC) in a joint venture with state-owned Myanmar Oil & Gas Enterprise (MOGE), the 770 km pipeline has been ready for two years but a change in Myanmar’s government and hard renegotiations over terms of use have prevented shipments.

New demands on transit fees by the Naypyidaw government have left a large crude carrier that is carrying oil from Azerbaijan for the pipeline stranded off the coast of Sri Lanka awaiting port docking permission, NewsBase cited Reuters as stating.

The new government, which came to power in March 2016, has asked for higher oil transit tax payments and improved port transit fees, NewsBase reported, citing Myanmar Business Today.

NewsBase also reported that according to The Irrawaddy, a purpose-built transit terminal in Kyaukphyu that was financed by China includes 12 storage tanks with a capacity of 600 000 bbls was officially opened in February 2015 by the former pro-Chinese government. Since then, however, it has stood empty.

The delays are holding up the commercial opening of a new 260 000 bpd refinery built by PetroChina near the capital of Yunnan Province, Kunming, where the pipeline.

Yangon’s Eleven Media noted in a commentary that relations with China were not “cordial” and that the Myanmar people traditionally viewed their larger neighbour as more an “intruder rather than an equal partner.” It added: “Therefore, China has to develop Myanmar as a good neighbour rather than using it as a stepping stone.”

NewBase reported that official Chinese media suggested this week that Naypyidaw might approve the pipeline during Chinese President Xi Jinping’s visit to Myanmar in April in order to strengthen economic ties with Beijing.

The Global Times quoted Zhu Zhenming, a deputy director of the Southeast Asia Research Institute, as saying: “The possible startup of the oil pipeline shows the Myanmar government attaches great importance to co-operating with China. It may be a ‘gift’ of the Myanmar president to China during his visit, intended to enhance co-operation in other fields.”

The oil pipeline, which reportedly cost US$1.5 billion to build, has a capacity of 12 million tpy (240 000 bpd). It runs parallel to a pipeline that is carrying gas from the Shwe offshore field in the Bay of Bengal to Yunnan.

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Asia pipeline news Crude oil pipeline news Onshore pipeline news