Myanmar, China finally reach deal on oil pipeline

Chinese President Xi Jinping (right) shakes hands with Myanmar's President Htin Kyaw at the Great Hall of People in Beijing, China, on April 10, 2017.
Chinese President Xi Jinping (right) shakes hands with Myanmar's President Htin Kyaw at the Great Hall of People in Beijing, China, on April 10, 2017. PHOTO: REUTERS

BEIJING • China and Myanmar have reached an agreement on an oil pipeline between the neighbouring countries after almost a decade of talks, with the project due to start operations "very quickly", Chinese Vice-Foreign Minister Liu Zhenmin said yesterday.

The new oil gateway fits with China's "One Belt, One Road" ambitions, linking it with central Asia and Europe, and will provide a more direct alternative route to sending Middle Eastern oil via the crowded Malacca Strait and Singapore.

Mr Liu's remarks, at the end of a visit by Myanmar President Htin Kyaw, mark the official launch of the 770km-long pipeline, which Beijing regards as essential to securing its oil needs. Dogged by sensitive relations between Naypyitaw and Beijing, the US$1.5 billion (S$2.1 billion) pipeline has been sitting empty for two years.

The first tanker carrying oil to Myanmar for delivery to China was expected last Saturday. However, a Myanmar government official said the ship may not have the official go-ahead to enter Myanmar.

It was unclear whether the ship had delivered its cargo.

"The oil pipeline will very quickly begin operation," said Mr Liu.

An agreement between China's PetroChina and Myanmar's government will allow the state energy giant to import overseas oil via the Bay of Bengal and pump it through the pipeline to supply a new 260,000 barrels-per-day refinery in landlocked Yunnan province.

The announcement wraps up President Htin Kyaw's six-day state visit to China, the first since he was elected, where he met President Xi Jinping and Premier Li Keqiang.

The two sides also agreed to work together to better manage security in northern Myanmar, saying that the conflict was an issue for both countries.

Fighting last month in Myanmar pushed thousands of people into China to seek refuge, prompting Beijing to call for a ceasefire between ethnic militias and the security forces.

REUTERS

A version of this article appeared in the print edition of The Straits Times on April 11, 2017, with the headline 'Myanmar, China finally reach deal on oil pipeline'. Print Edition | Subscribe