Oil starts flowing through China-Myanmar pipeline

Workers connect a conduit to the 140,000-ton crude tanker Suezmax, to unload oil at Made Island oil port in Myanmar on Monday. Crude oil will then be transported to China via the China-Myanmar crude oil pipeline. [Photo/Xinhua]

The China-Myanmar crude oil pipeline started operations after an oil tanker began offloading crude oil in the Southeast Asian country on Monday, which signals a new phase in energy cooperation between the two countries and helps ensure China's oil and gas imports.

The 140,000-metric-ton oil tanker Suezmax began offloading crude oil at Made Island oil port, the starting point of the pipeline, in Myanmar.

The 771-kilometer pipeline ends in southwestern China's Yunnan province.

The pipeline has a designed annual transmission capacity of 22 million tons. Once the pipeline becomes fully operational, Myanmar can also be provided with 2 million tons of crude oil through it annually.

China National Petroleum Corp, the country's largest oil and gas producer, holds a 50.9 percent stake in the pipeline, while Myanmar Oil and Gas Enterprise owns the remainder.

"The pipeline well ensures China's oil and gas import diversification, following the second China-Russia crude oil pipeline, which started operation last year in northeastern China's Heilongjiang province, and the China-Kazakhstan oil pipeline," said Li Li, energy research director at ICIS China, a consulting company that provides analysis of China's energy market.

With the new pipeline, China's oil and gas imports will no longer have to pass through the Malacca Straits, a narrow channel that connects the Indian Ocean with the Pacific Ocean, Li said.

"The safety level of pipeline transmission is much higher than for sea shipments, which will ensure a stable energy supply to China," she said. "The economic benefits will grow as deliveries increase."

The oil gateway will help ease the oil supply shortage in southwestern China, CNPC's South-East Asia pipeline company said.

China and Myanmar signed an agreement on Monday, which allows CNPC to import oil via the Bay of Bengal in Myanmar and pump it through the pipeline to a new refinery in Yunnan.