CNPC to Start Construction of China-Burma Oil and Gas Pipeline Project in 1Q09

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Researched by Industrial Info Resources (Sugar Land, Texas)--Construction of the Kunming section of the China-Burma oil and gas pipeline project proposed by China National Petroleum Corporation (CNPC) (Beijing) is expected to begin in the first quarter of 2009, said Chou He, secretary of CPC Kunming Commission. Construction of the $2.55 billion project reportedly will take between four and five years. The purpose of the project is to change China's current high reliance on the Malacca Strait for oil and gas imports.

CNPC proposed the project as early as 2004. According to the initial plan, the pipeline was to start from Sittwe, a port city in western Burma, and end in Kunming, the capital city of southwestern China's Yunnan province. The pipeline will have a total length of about 2,380 kilometers and an annual transportation capacity of 20 million metric tons, or about 400,000 barrels per day (BBL/d).

Upon the completion of the project, the new oil refining facilities and strategic oil reserve base built in Yunnan could greatly reduce the domestic transportation distance of crude oil in China.

Based on another report, CNPC plans to extend the pipeline to Chongqing and build 214,000-BBL/d oil refineries in Kunming and Chongqing. Because of the limit of environmental capacity in Chongqing, the capacity of the refinery in Kunming could be increased to 428,000 BBL/d, although a final decision has not yet been made.

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