China National Petroleum Corp has announced that September will begin construction on a 1,100 km long crude oil pipeline to Myanmar, after signing a memorandum of understanding with Myanmar's Ministry of Energy.
The 1,100 km long oil pipeline, with an annual capacity of 22 million tonnes, or 442,000 barrels a day, will start in Kyaukryu port on the west coast of Myanmar and will end in Kunming, the capital of Chinas Yunnan Province. The move comes in an attempt to cut transportation costs by shortening the journey for crude travelling from the Middle East and Africa, from where it is expected to transfer 20 million tonnes of crude oil annually.
By 2010 Myanmar are also expecting to welcome a 300,000-deadweight tonne crude port and an oil tank with storage capacity of 600,000 m3 to be built.
The oil pipeline can reduce the transport route by 1,200 km as compared to ocean shipping besides reducing China's reliance on the risky Straits of Malacca for oil import.
It is expected that CNPC will be responsible for design, construction, and operation of the project.
The project will open the fourth route for China's oil and natural gas imports, after ocean shipping, the Sino-Kazakhstan crude oil and natural gas pipelines, and the Sino-Russian oil.