ENERGY IN MYANMAR

ENERGY IN MYANMAR

Much of Myanmar’s petroleum, natural gas and hydropower is still untapped. There is a lot of oil and natural gas off the west coast of Thailand and Myanmar. There is also oil in the Irawaddy valley. The state-owned Myanma Oil and Gas Enterprise (MOGE) is a national oil and gas company and main energy company in Myanmar. The energy industry is supported and influenced by China and foreign oil companies. The drilling and refining of oil is mostly on a small scale, and doesn’t produce enough for export.

Bloomberg reported: “Myanmar is estimated to hold between 11 trillion and 23 trillion cubic feet of natural gas and currently produces around 19,600 barrels per day of oil and 1.475 billion cubic feet (41.77 million cubic meters) per day of gas, IHS Energy’s Bakir said. [Source: Rakteem Katakey, Bloomberg, September 17, 2012]

The total electricity generated by Myanmar in 2002 was 6614 GWh, consisting of oil (612 GWh, 9 percent); gas (3770 GWh, 57 percent); and hydro (2232 GWh, 34 percent). Pipelines: gas 3,046 km; oil 551 kilometers (2010)

As of 2014 three-quarters of the population of Myanmar was still without electricity. Even in places that have electricity the lights flutter on and off when the early rains of Burma’s monsoon season start.

Power Outages and Gas Prices in Myanmar

Power outages are common and many places don’t have electricity. Places that do often only have it a few hours a day. Diesel generators are need to maintain a steady electricty supply. Gasoline is rationed. Bottles with flowers indicate bottles of gasoline for sale. Much of the countryside is black because there is no electricity.

In the 1990s the official government price for gasoline was $.50 a gallon. The distribution of this vital resource was so poor however that the black market price often rose to over $10 a gallon. And this is in a country, whose oil wells Japan and Britain fought over in World War II.

In 1997, the military paid $.15 a gallon for gasoline while ordinary people paid $1.75. In the early 2000s gasoline was rationed at two gallons a month at $6 a gallon. On the black market gasoline went for as much as $35 a gallon.

In June 2012, Reuters reported: Myanmar President Thein Sein “alluded to recent street protests over chronic power outages by acknowledging that the popular demand for electricity outstripped the supply from the country's mainly hydroelectric sources. He announced the formation of a national energy committee to investigate alternative energy sources such as natural gas, much of which Myanmar now sells to neighbouring Thailand. [Source: Reuters, June 19, 2012]

Gas Prices Triggered the Saffron Revolution Protests in 2007

Myanmar had to import $600 million of oil products in 2006. This one reason it was forced to slash diesel subsidies in August 2007, triggering the biggest anti-regime protests in 19 years.

The Saffron Revolution Protests began in mid August 2007 after the Myanmar government abruptly rose fuel price that including a large hike in gasoline prices. In some places fuel prices were increased by as much as 500 percent. People were upset and took to the streets. In one cases two dozen protesters were only able to march 30 meters before they were beaten and wrestled into trucks by vigilante thugs.

Al-Jazeera reported: “At least 500 people led by pro-democracy activists in Myanmar have held a rare protest in Yangon over the government's arbitrary increase of fuel prices. A few days earlier the military government imposed a 100 per cent rise in fuel prices at state-owned petrol stations without giving any reason.The march led by former student activists of the 88 Generation Students' Group began with about 100 people, moving along a major road north of Yangon. The protesters did not shout slogans or hold up placards. The group said the crowd swelled as bystanders joined in before dispersing after marching for about nine kilometers. [Source: Al-Jazeera, Agencies, August 20, 2007 =]

“The protesters, including some former student leaders who have served long prison terms, said the authorities watched and videotaped the event but did not interfere. Min Ko Naing, a former student leader, said the protest was "to reflect the hardship our people are facing due to the government's fuel price hike". "Some cars stopped and those inside clapped their hands when they knew that we were staging this performance in protest against the fuel price hike," he added. =

“The government of Myanmar, formerly Burma, has a monopoly on fuel sales. The immediate effect of the massive price hike was felt by commuters as bus fares increased along with prices of basic consumer goods. In a statement, the Asia Pacific People's Partnership on Burma (APPPB) demanded that the government tackle the resulting problem of skyrocketing commodity prices and inflation rate. The APPPB said the increase in the price of natural gas was "not rational" given its abundance in the country. Khin Ohmar, the APPPB co-ordinator, quoted Ktay Kywe, a former student leader, as saying that while the majority had to walk, the military elites had vehicles that cost between $75,000 and RM250,000.” =

Two days later Aye Aye Win of Associated Press wrote: “ Hundreds of pro-democracy activists marched to protest the doubling of fuel prices by Myanmar's military government but scattered as junta supporters took at least six away in cars, witnesses said. About 300 protesters walked from the outskirts of the commercial capital Yangon, encouraging onlookers to join the rare display of public opposition as plainclothes police officers watched from a distance, witnesses said. "We are marching to highlight the economic hardship that Myanmar people are facing now, which has been exacerbated by the fuel price hike," a protester who identified herself only as Mimi told onlookers. [Source: Aye Aye Win, Associated Press, August 22, 2007 +]

See History

Electricity in Myanmar

Electricity - production: 5.708 billion kWh (2009 est.), country comparison to the world: 114. Electricity - consumption: 3.794 billion kWh (2009 est.) country comparison to the world: 124. Electricity - installed generating capacity: 1.86 million kW (2009 est.), country comparison to the world: 104. [Source: CIA World Factbook ><]

Electricity - from fossil fuels: 67.7 percent of total installed capacity (2009 est.), country comparison to the world: 114. Electricity - from nuclear fuels: 0 percent of total installed capacity (2009 est.), country comparison to the world: 53. ><

Electricity - from hydroelectric plants: 32.3 percent of total installed capacity (2009 est.), country comparison to the world: 70. Electricity - from other renewable sources:0 percent of total installed capacity (2009 est.), country comparison to the world: 112. Electricity - exports: 0 kWh (2010 est.), country comparison to the world: 167 Electricity - imports: 0 kWh (2010 est.), country comparison to the world: 164. ><

Only 25 percent of Myanmar's 60 million or people have access to the national grid, according to the World Bank. Many cassette players and televisions in villages are operated by car batteries. You often see people walking around with car batteries. Some farmers have microhydro plants that supplies electricity for their families and a few neighbors.

Ill-Conceived Jatropha Biofuel Scheme in Central Myanmar

Reporting from Pyaw Gan, Myanmar, Ed Cropley of Reuters wrote: “They may look leafless and lifeless, but Kyaw Sinnt is certain his nut-trees are the key to Myanmar's chronic energy shortage. Others are less sure, saying the junta's plan to turn the country into a giant plantation of biofuel-producing "physic nuts" is yet another example of the ill-conceived central planning that has crippled a once-promising economy. "I think it's a great idea. Everybody can take part and it's good for the environment," Kyaw Sinnt said, standing next to a small patch of the stick-like shrubs in Pyaw Gan, a bamboo hut village typical of the parched "Dry Zone" southwest of Mandalay. [Source: Ed Cropley, Reuters, March 12, 2008 ///]

“Fortunately for Pyaw Gan's residents, the plants, also known as jatropha, are drought-resistant, and energy experts consider them a very promising source of biofuel since they do not oust food crops such as sugar or corn. Clearly the former Burma's ruling generals think so too. In the middle of 2006, the junta decreed that every farmer with an acre of land had to plant 200 physic nut seeds around the perimeter of their plots. Even though farmers had to buy the seeds themselves from the government for 800 kyat ($0.60) -- about half a day's wages for a manual laborer -- the scheme caught on. Now, jatropha groves can be seen across the country, from deserted roadsides in the central plains to deforested hills near the Chinese border and in window-boxes in the heart of Yangon, the commercial capital. ///

“In 2007, a senior Energy Ministry official was telling oil industry bigwigs in Singapore that 7 million acres of plantation would be "in full swing" by mid-2007 and that biodiesel exports would follow quickly. The only problem is that nobody knows whether the generals have kept their side of the bargain and built the refining plants necessary to turn sacks of hairy brown nuts into biodiesel. Several big conglomerates with close ties to the regime have announced plans to get involved, but it is impossible to say how close to actually producing biodiesel they might be. ///

“Analysts believe the answer is "not very", using as evidence a suggestion from one government minister that people simply grind the nuts in their own homes and then pour the resultant oily residue straight into their fuel tanks. "How these jatropha acreages will be converted into biodiesel has not yet been determined, since Burma lacks anything like the capacity to refine physic nuts into useable fuel," Sean Turnell of Australia's Macquarie University said. "The whole episode is illustrative of a more profound and pervasive system of centralized and often irrational decision making that lies at the heart of Burmese agriculture," he said. ///

“There certainly doesn't seem to be anything remotely like a processing plant anywhere near Pyaw Gan, which is unreachable by vehicle during the wet season. "It's a complete waste of time," said one businessman in the town of Nyaung U, 30 kilometers (20 miles) away who did not wish to be named for fear of recrimination. "There is no processing plant, and if there was, it would cost four times as much as normal diesel. It's all for show -- just like our wonderful new irrigation channels that never have any water because they never turn the pumps on," he said. ///

“Doubting the junta's stated motive, ordinary Burmese have come up with their own theories for the nut drive. The most popular, but not necessarily the most credible, is that it is all a word-play plan by the superstitious generals to negate the spiritual power of their arch enemy, detained opposition leader and Nobel laureate Aung San Suu Kyi. In Burmese, physic nuts are roughly pronounced 'chay soo', which is very close to an inversion of Suu Kyi's shortened name, pronounced 'soo chee'. Not that anybody in Pyaw Gan cares. They only words of English they know are "Hello", "David Beckham" and "biodiesel". ///

Oil and Gas Companies and Foreign Energy Deals in Myanmar

Myanma Oil and Gas Enterprise (MOGE) is a national oil and gas company of Burma. The company is a sole operator of oil and gas exploration and production, as well as domestic gas transmission through a 1,200 miles (1,900 km) onshore pipeline grid.

California-based Unocal and France-based Total have oil and gas fields in Myanmar and have been major forces in building an expensive natural gas pipeline from offshore fields to Thailand. Chevron still has a large stake in Myanmar even though it has sold off some its assets. Texaco and Arco have signed deals with MOGE. Other companies that want a piece of the oil and natural action in Myanmar have included Premier (Britain), Nippon (Japan) and Petronas (Malaysia).

China and India are competing head to head for oil assets in Myanmar. China National Petroleum Corporation (CPNC) and India’s Oil and Natural gar Corporation (ONCG) tried to obtain the $700 Chevron stake in a Myanmar gas field. that Chevron was selling.

In December 2006, an Indian and Singaporean consortium—Silver Wave Energy of Singapore and Gail India—signed a deal to drill for oil and gas in the offshore Block A-7 off the coast of Rakhine. In September 2006, Myanmar signed an energy agreement with Russian and Indian companies to jointly explore and produce oil and gas off Myanmar’s southern coast. The deal was signed between Myanmar’s state-run oil and gas company and JSC Zarubezhneft Itrea Oil and Gas of Russia and the Sun Group from India. The site is located in the Gulf of Martaban.

South Korea’s Daewoo and MOGE, the Myanmar state oil company, are participating in the $5.6 billion Shwe project to exploit an offshore gasfield in the Bay of Bengal. CNPC of China outbid India to obtain an agreement to buy oil and gas from the project for 30 years. The Norwegian company Seadrill is involved in offshore oildrilling off Myanmar.

Rakteem Katakey of Bloomberg wrote, Myanmar “is trying to fund the government better by luring companies from BP to Royal Dutch Shell....The country plans its biggest auction of exploration blocks for oil and gas. Oil & Natural Gas Corp. (ONGC) of India bid. France’s Total SA (FP), one of the few foreign companies that operated under the old dictatorship, said it bought 40 percent of an offshore permit. [Source: Rakteem Katakey, Bloomberg, September 17, 2012 //\\]

“OAO Gazprom, the world’s biggest gas producer, is in discussions with the Myanmar government to participate in energy projects in the country, according to the Moscow-based company’s website, without giving details. “Myanmar is very under-explored,” said Managing Director D.K. Sarraf of ONGC Videsh Ltd., the Indian oil company’s overseas unit. “We think there are large reserves of both oil and gas that are yet to be found,” Sarraf said. “We expect intense competition for assets there.” //\\

Oil in Myanmar

Much of Myanmar’s petroleum is still untapped. There is a lot of oil off the west coast of Thailand and Myanmar. There is also oil in the Irawaddy valley. The state-owned Myanmar Oil and Gas enterprise is the main energy company in Myanmar. The energy industry is supported and influenced by China and foreign oil companies. The drilling and refining of oil is mostly on a small scale, and doesn’t produce enough for export.

The Burmese first discovered oil near Yenangyuang several centuries ago. Pumped out of the ground by hand, the oil was owned through the years by 24 families who sold it for preserving wood and lighting oil lamps. In 1795, a young British army officer was shown some of the oil. He sent several urgent messages back to his headquarters in India, expressing the importance of what he had seen, but his messages were filed away and ignored. Japan and Britain fought over Burmese oil in World War II.

Crude oil - production: 20,200 bbl/day (2011 est.), country comparison to the world: 71. Crude oil - exports: 880 bbl/day (2009 est.), country comparison to the world: 66. Crude oil - imports:0 bbl/day (2009 est.), country comparison to the world: 161. [Source: CIA World Factbook ++]

Crude oil - proved reserves: 50 million bbl (1 January 2012 est.), country comparison to the world: 80, Refined petroleum products - production: 16,700 bbl/day (2008 est.), country comparison to the world: 100; Refined petroleum products - consumption: 40,620 bbl/day (2011 est.), country comparison to the world: 108; Refined petroleum products - exports: 0 bbl/day (2008 est.), country comparison to the world: 156; Refined petroleum products - imports: 12,730 bbl/day (2008 est.), country comparison to the world: 127. ++

Initiation to bid on oil exploration licenses for 18 of Myanmar’s onshore oil blocks has been released on January 18, 2013.[51

Natural Gas in Myanmar

Much of Myanmar’s natural gas is still untapped. There is a lot of natural gas off the west coast of Thailand and Myanmar. The state-owned Myanmar Oil and Gas enterprise is the main energy company in Myanmar. The energy industry is supported and influenced by China and foreign oil companies.

Bloomberg reported: “Myanmar is estimated to hold between 11 trillion and 23 trillion cubic feet of natural gas and currently produces 1.475 billion cubic feet (41.77 million cubic meters) per day of gas, IHS Energy’s Bakir said.Output may rise by 300 million cubic feet a day next year when PTT Exploration & Production starts the offshore Zawtika project. Projects operated by South Korea’s Daewoo International Corp. in the Rakhine Basin may add 500 million cubic feet a day at a peak rate, he said. [Source: Rakteem Katakey, Bloomberg, September 17, 2012]

According to Japan Oil, Gas and Metals National Corporation Myanmar natural gas reserves were estimated at 538 billion cubic meters as of the end of 2006. This means that Myanmar has the third largest natural gas reserves in Southeast Asia after Indonesia and Malaysia.

Natural gas accounted for a 30.2 percent of Myanmar’s exports in 2005, making it an important source of foreign exchange. One reason the percentage is so high is because Myanmar’s other economic sectors perform, so poorly, in part because of sanctions.

Rakteem Katakey of Bloomberg wrote, “With existing drillers Total and competitors such as Thailand’s PTT Exploration & Production Pcl (PTTEP) pumping more gas than they’re discovering, Myanmar’s known reserves dropped an average 15 percent from 2007 to 2011, to 7.8 trillion cubic feet from 21.2 trillion cubic feet, BP Statistical Review 2012 data show. Production declined 8.2 percent to 11.2 million metric tons of oil equivalent in the period, according to the data. [Source: Rakteem Katakey, Bloomberg, September 17, 2012]

Natural gas - production: 12.1 billion cu meters (2010 est.), country comparison to the world: 39; Natural gas - consumption: 3.29 billion cu meters (2010 est.), country comparison to the world: 71; Natural gas - exports: 8.81 billion cu meters (2010 est.), country comparison to the world: 24. Natural gas - imports: 0 cu meters (2010 est.), country comparison to the world: 164. [Source: CIA World Factbook]

Natural gas - proved reserves: 283.2 billion cu meters (1 January 2012 est.) country comparison to the world: 41. It is estimated that there is at least five trillion cubic feet of natural gas under the Andaman Sea, worth billions of dollars. This area is shared mostly by Myanmar, Myanmar, India and Bangladesh.

In the early 2000s, Myanmar earned about $400 million a year from the sale of natural gas. It exported $3.5 billion worth of gas, mostly to Thailand, in the fiscal year up to March 2012. Bloomberg reported: “Natural gas exports are set to rise in 2013 as more gas fields and pipelines become operational, according to the Asian Development Bank. Chevron Corp. (CVX), Total and China National Petroleum Corp. are among companies with oil and gas investments in Myanmar. [Source: Rakteem Katakey, Bloomberg, September 17, 2012]

Myanmar’s Offshore Natural Gas Fields and Projects

Myanmar’s two main offshore natural gas fields—Yadana gas field and Yetagun gas field—are about 50 to 100 kilometers off the coast of southern Myanmar almost directly west of Bangkok. Pipelines connect them to the Bangkok area. The Yadana Project is a project to exploit the Yadana gas field in the Andaman Sea and to carry natural gas to Thailand through Myanmar. The Malaysian oil company Petronas took over the Yetagan gas project from Premier Oil, a British company. Production from the offshore Shwe and Shwe Phyu fields, which are estimated to hold up to 10 trillion cubic feet of natural gas, began in 2008.

China, India and Thailand and other countries have been competing to develop Myanmar’s natural gas fields since 2004. In 2006, Alan Sipress wrote in the Washington Post, “India now hopes to import natural gas from a huge field discovered in 2004 off Burma's west coast. With production still several years off, the Indian government has been negotiating with Bangladesh to build a pipeline to transport Burmese gas. Daewoo International, the South Korean company, is the largest investor in the gas development. Two other Burmese fields are already exporting natural gas to neighboring Thailand, and several more are being explored by companies in China, India and Singapore. [Source: Alan Sipress, Washington Post, January 7, 2006]

Maritime Dispute between Bangladesh and Myanmar Over Natural Gas

In May 2013, Narinjara reported: “The leaders of Myanmar and Bangladesh are both feeling political pressure to settle the long-drawn-out dispute over maritime boundaries in the Bay of Bengal. The maritime boundary was, at least until 2007, not a significant issue for either Myanmar or Bangladesh . So why, after largely ignoring the dispute for two decades, are both countries suddenly so keen to settle it? The answer is two-fold. First, the disputed area could contain billions of dollars of undiscovered natural gas that these countries can finally access. Second, the economic and political motivations pushing Myanmar and Bangladesh to settle have never been stronger. [Source: Narinjara, May 14, 2013 )(]

“Both Dhaka and Naypyidaw have high hopes for natural gas in the disputed area. This optimism largely results from the bonanza of other finds in the Bay of Bengal over the last decade. The biggest, India's massive Dhirubhai fields, already and produces more natural gas than all of Myanmar's offshore wells combined. According to Dhirubhai's developer, Reliance Industries, the field currently produces 1,236 million cubic feet per day, compared to the Myanmar Oil and Gas Enterprise (MOGE) stated production of 1,090 for Myanmar's entire offshore production. )(

“The discovery of Myanmar's Shwe fields, though not nearly the size of Dhirubhai, furthered hopes because it lies so close (about 50km) to the disputed area. Shwe, Dhirubhai, and many other gas-rich parts of the world also share similar geologic characteristics with the disputed area. The high hopes for gas from the disputed area are shared by energy companies, including Conoco Phillips. In a 2009 report, it characterized Bangladesh's offshore area, including parts of the disputed area, as having high potential for deep water natural gas. All of these signs together have convinced Dhaka and Naypyidaw that there is gas in the disputed area.” )(

Yadana Gas Pipeline Between Myanmar and Thailand

The $1.2 billion Yadana natural gas pipeline is one of the single largest investment projects in Myanmar. Built by two foreign oil companies—California-based Unocal and France-based Total—it stretches for 416 miles from offshore natural gas platforms in Myanmar territory in the Yadana fields in the Andaman Sea to Ratchaburi, Thailand. Construction began in 1992 and was finished in 1998. The Yadana gas pipeline is the single largest earner of foreign currency for Myanmar. Unocal holds a 28 percent interest in the project and Total 31 percent. Unocal is initially earned about $150 million a year from the project. The pipeline was exempt from U.S. sanctions. About half the natural gas goes to Thailand and a quarter is supposed to go towards a fertilizer plant and energy facility.

Many human rights activists were opposed to the Yadana pipeline on the grounds that it helped prop up the military government by providing it with desperately needed foreign currency. The pipeline also crossed land claimed by Karen and Mon minorities insurgents, infringing on their claims and requiring troops to protect it.

People living in the area of the Yadana pipeline have been forced to flee their villages. One woman told the Washington Post, she was interrupted while cooking and told to leave by a soldier who kicked her in the ribs so hard her baby fell in a fire and died. Forced labor was used to build a railroad to bring soldiers to the area occupied by Karens, where the pipeline was being built.

In defense of the project, Unocal and Total have said that the pipeline improves the lives of 35,000 people. The companies spent more than $6 million on medical care, education and other development projects. They have built schools, clinics, more than 100 animal farms and shrimp farms; hired doctors for villagers; and brought electricity to remote villages. They have paid villagers $1 million for 525 acres of land and paid local people $2 a day (a good salary in Myanmar).

Pipelines Between Myanmar and China and India

New gas and oil pipelines have recently opened up between Myanmar and China. The new pipelines “provide China with an alternative supply route should the Strait of Malacca ever be blocked because of piracy, terrorism or conflict”, Stephanie Kleine-Ahlbrandt, northeast Asia director at International Crisis Group, told the Financial Times . “Beijing also fears that the straits could be threatened or cut off by the US if there was ever a conflict between the countries in the Taiwan Strait or elsewhere.” [Source: Jamil Anderlini in Beijing and Gwen Robinson in Yangon, Financial Times, January 21, 2013 \\//]

Jamil Anderlini and Gwen Robinson wrote in the Financial Times, “Myanmar will take no more than 2 tonnes of crude oil and 2 billion cubic meters of gas a year from the pipeline for its domestic consumption. Construction on the 800-kilometre natural gas pipeline began in 2009 in the western state of Rakhine. Complaints of lack of proper environmental impact studies and inadequate compensation have dogged the venture, signed in 2009 when Myanmar was still under military rule. \\//

“Human rights and environmental groups have criticised the pipeline for safety concerns, environmental damage and inadequate compensation for residents affected by its construction. Chinese state media reports laud the project for contributing to the economy of Myanmar and solidifying the “brotherly” bond between the two countries. But Beijing has discreetly signalled growing anxiety about the future of various big infrastructure and natural resources projects in Myanmar – particularly the gas pipeline and its Kyaukpyu port and industrial zone development, as well as the controversial Monywa copper mine, a joint venture between Chinese weapons maker Norinco and the Myanmar military. The mine was the scene of a violent government crackdown on protesters late last year. \\//

Varigonda Kesava Chandra wrote in the Journal of Energy Security, “The lack of convergence in the energy security policies of India and Bangladesh has impacted the outcome of the Myanmar-Bangladesh-India (MBI) pipeline project. This project, envisaged as an important aspect of the energy security policy of India, has in the past failed to accommodate the needs of Bangladesh; this has resulted in an indefinite delay in project implementation. However, recent changes in the energy scenario of Bangladesh have enabled greater convergence in the energy policies of both countries leading once again to prospects of a revival of the project. Project implementation has also been stalled by the construction of the Myanmar-China pipeline project which consists of dual oil and gas pipelines originate at Kyaukryu port on the west coast of Myanmar and enter China at Yunnan's border city of Ruili. Competition between the two projects stems from uncertainty regarding just how much gas Myanmar actually has for export. [Source: Varigonda Kesava Chandra, Journal of Energy Security, April 19, 2012]

China-Myanmar Gas Pipeline Opens in May 2013

A Sino-Burma oil and natural gas pipelines linking Burma's deep-water port of Kyaukphyu (Sittwe) in the Bay of Bengal with Kunming in Yunnan province, China—connecting the Indian Ocean coast of Myanmar with southwest China—began pumping natural gas in May 2013. Jamil Anderlini and Gwen Robinson wrote in the Financial Times, “The new pipeline will help free China from its over-dependence on the Strait of Malacca as transit way for its energy imports, giving the country an alternate and shorter supply route. CNPC, the parent of PetroChina, said on its website that 793 kilometer pipeline would be fully operational 30, less than three years after construction began.A parallel pipeline that will transport crude oil imports from the Middle East and north Africa across the width of Myanmar and into China is expected to be finished by 2014, the reports said. [Source: Jamil Anderlini in Beijing and Gwen Robinson in Yangon, Financial Times, January 21, 2013 \\//]

“The new gas pipeline will have the capacity to carry 12 billion cubic meters of gas a year to China, with most of that supply to come from Myanmar’s gasfields in the Indian Ocean. As China tries to diversify away from a heavy reliance on coal, its natural gas demand is forecast to grow by an average of 20 per cent a year between 2010 and 2015, with the main constraint being a lack of supply.

“China’s piped gas is mainly imported from areas around the Malacca Strait,” Lin Boqiang, a professor with the China Center for Energy Economics Research at Xiamen University, told the state-run Global Times. “Now we have one more pipeline from the land instead of the seabed, which will decrease” China’s energy vulnerability.

Construction of the gas pipeline began in 2010. It is part of a so-called Myanmar-China Oil and Gas Pipeline project, which also includes building a crude oil pipeline. The Myanmar section of the gas pipeline started to deliver gas to China in late July. The CNPC is the parent company of China's top oil and gas producer -- PetroChina.

In October 2013, Xinhua reported: “The China National Petroleum Corporation (CNPC) said Sunday that the China-Myanmar gas pipeline has gone into full operation after the completion of its end section connecting the cities of Lufeng and Guigang in southwest China. Some 793 kilometers of the 2,520-kilometer trunk line are in Myanmar, while the rest is in China. It is expected to send 12 billion cubic meters of natural gas annually to Myanmar and southwest China, which will reduce coal consumption by 30.72 million tonnes per year, according to the CNPC. [Source: Xinhua, October 20, 2013]

Wu Hong, general manager of the CNPC's pipeline construction department, said the China-Myanmar gas pipeline will linked with the pipeline that sends gas from China's remote northwest to the east coast, hence greatly increase the reliability of supply to customers, particularly in case of emergency.

China-Myanmar Oil Pipeline

A oil pipeline parallel to the gas pipeline will transport crude oil imports from the Middle East and north Africa across the width of Myanmar and into China. The crude oil pipeline scheduled to go into operation in 2014 will be able to carry 22m tonnes a year of imported crude to China. The country imported a total 271m tonnes of crude oil in 2012. [Source: Jamil Anderlini in Beijing and Gwen Robinson in Yangon, Financial Times, January 21, 2013 \\//]

Jamil Anderlini and Gwen Robinson wrote in the Financial Times, ““At present, about 80 per cent of China’s crude oil imports are transported through the strategically important Strait of Malacca, but the new oil pipeline is expected to reduce China’s reliance on that route by about one-third. The new pipeline should cut the transport distance for African and Arabian oil shipments by about 1,200km.But far more important to Beijing than the shorter distance will be reducing the vulnerability that comes from so much of the country’s energy supply being transported through a geographical chokepoint that is effectively controlled by the US, which remains the strongest naval power in the region, despite China’s growing investment in its own military. \\//

Christina Larson of Bloomberg wrote: “In 2009, two state-owned energy giants inked a $2.5 billion agreement to loosen the pinch: China National Petroleum and Myanmar Oil & Gas Enterprise agreed to lay down more than 500 miles of oil and gas pipelines from Myanmar’s western coast to China’s southwestern Yunnan province. With this When the oil pipeline goes online in 2014 tankers carrying crude from the Middle East and Africa will be able to dock at Myanmar’s port of Kyaukpyu and send as many as 440,000 barrels of oil a day overland to China. Industry news service Platts (MHFI) reports that the oil pipeline is 75 percent complete and should be operational by June. [Source: Christina Larson. Bloomberg, February 4, 2014 =]

“At the time the pipeline project was launched, Myanmar was still ruled by a military junta and acted as a de facto vassal state to China. Neither is the case today. “Myanmar’s remarkable democratic transition over the past couple of years has unleashed a wave of anti-Chinese feeling,” Tom Miller, managing editor of China Economic Quarterly, wrote in a research brief last summer. “Myanmar is starting to act less like a client state and more like an independent one. China knows its pipelines are vulnerable to a strike by nationalist rebels—or, potentially, to an unfriendly government.” Miller referenced a text message that went viral across Myanmar in late 2012: “Chinese get out. We’re not afraid of you.” =

“One recent clash at a pipeline work camp seemingly attests to the rise of anti-Chinese sentiment in Myanmar. Last week police detained more than 20 Burmese pipeline workers after a feud with Chinese workers at the same construction site escalated to arson, ending with an oil-storage facility and another building engulfed in flames on Jan. 27; an investigation is ongoing. One Burmese resident of a nearby town told the newspaper Irrawaddy: “It is unjust that the Chinese are the ones who started the problem but none of them got arrested.” Expect more sparks to fly. =

Image Sources:

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, Lonely Planet Guides, The Irrawaddy, Myanmar Travel Information Compton’s Encyclopedia, The Guardian, National Geographic, Smithsonian magazine, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Global Viewpoint (Christian Science Monitor), Foreign Policy, burmalibrary.org, burmanet.org, Wikipedia, BBC, CNN, NBC News, Fox News and various books and other publications.

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© 2008 Jeffrey Hays

Last updated May 2014

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