China’s state-owned China National Petroleum Corp., aiming to improve the security and speed of Chinese oil supplies from the Middle East and Africa, has begun construction of import facilities for an oil pipeline across neighboring Myanmar.
CNPC said it has begun building a large-scale oil port in the Myanmar city of Kyaukpyu in Rakhine State as a facility for the planned China-Myanmar oil pipeline project.
Kyaukpyu is on Ramree Island about 400 km northwest of Yangon, and is due to become the import terminus for Middle East and African tankers supplying oil to China. The new port will be able to receive vessels of up to 300,000 dwt and will have storage capacity of 600,000 cu m.
The oil will then be transported from Kyaukpyu by a 771-km line across Myanmar to Kunming in China's Yunnan province. CNPC said the line will eventually carry 84 million bbl/year of oil, but it did not say when the line would begin operating.
The pipeline is expected to improve China’s energy security by speeding delivery of Middle Eastern and African oil to China and eliminating the need for oil tankers to pass through the crowded and pirate-infested waters of the Malacca Strait between Malaysia and Indonesia.
China has been determined to diversify its oil import routes dues to concerns about supply security. About 75% of China's oil imports in 2008 were from the Middle East and Africa and most of those cargos were shipped through the Malacca Strait.
Experts say the oil line will reduce the length of the transport route for oil to China by 1,200 km, while providing supplies for two refineries to be located in Chongqing city in Sichuan province and in Yunnan province.
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The start of construction of the oil facilities in Kyaukpyu coincides with CNPC’s plans for another pipeline from Myanmar, which is scheduled to begin carrying 12 bcm/year of gas to southwestern China in 2012.
