Myanmar-China gas pipeline ready for start-up end-May: Media

BEIJING (REUTERS) - A natural gas pipeline connecting Myanmar with China will start pumping gas from offshore Myanmar to energy-thirsty southwestern China by end-May, Chinese state media reported on Monday.

CNPC, parent of PetroChina, has finished the most difficult parts of the project, including cutting through mountainous terrain, and is now in the final stage of completing the pipeline able to carry 12 billion cubic metres of gas a year, the People's Daily reported.

The gas line runs 793 km in Myanmar and another 1,727 km in China. A parallel oil pipeline of similar length, designed to carry 440,000 barrels per day of crude oil, will begin operations in 2014, the paper said, a timeline slightly behind an earlier schedule.

This link will allow China to ship in oil from the Middle East and Africa via the Indian Ocean and a port on the west coast of Myanmar, bypassing the narrow Malacca Strait.

Myanmar will offload no more than 40,000-bpd of crude oil and 2 bcm of natural gas a year from these two projects to cover local consumption, the paper said. The gas pipeline will be fed by fields offshore the western state of Rakhine.

Official data shows Myanmar exported US$3.5 billion (S$4.3 billion) worth of gas, mainly to neighbouring Thailand, in the fiscal year to March 2012, compared with US $2.5 billion the previous year.

Both pipelines to China start from the Myanmar port of Kyaukphyu, then head in a northeasterly direction towards the city of Mandalay before arriving in the Chinese border city of Ruili in Yunnan province.

From there the pipelines go to Yunnan's capital Kunming and eventually the cities of Chongqing and Nanning, in land-locked southwestern parts of China where energy supplies are scarce but demand is growing fast.

The pipelines are controversial as rights group say money generated will not benefit the people of Myanmar and that there have been problems with land confiscation and forced labour.

CNPC has said it properly compensated residents and tried to maximise use of local raw materials and equipment.

About 6,000 local people were hired at the peak of building the two pipelines, and hundreds of local technicians will be employed for daily operations, the People's Daily cited a CNPC official as saying.

China has long worried about its ties with Myanmar, where there has been a history of resentment of China among the Burmese population and fierce public opposition to a US$3.6 billion Chinese-built dam at Myitsone. President Thein Sein shelved that project in 2011, a move that stunned Beijing.

More recently, China has expressed concern about fighting between Myanmar government forces and ethnic minority rebels in an area close to the Chinese border, near which the pipelines will run.

Myanmar, a country of 60 million people that is the size of England and France combined, is believed to be rich in natural gas. Government officials estimate the gas reserves between 11 trillion and 23 trillion cubic feet.

It produces around 19,600 barrels of crude oil and 1.475 billion cubic feet of natural gas each day.