Tue 22 Dec 2009
Filed under: Business / Trade
Yangon – China National Petroleum Corp (CNPC) has secured exclusive ownership and management rights over a planned 771-kilometre, overland Myanmar-China crude oil pipeline, industry sources said Tuesday.The contract signing was witnessed by Chinese Vice President Xi Jinping and Maung Aye, vice chairman of Myanmar’s ruling military junta, over the weekend in Naypyitaw, Myanmar’s military capital, CNPC said in a statement posted on its website.
Under the terms of the agreement, CNPC is allowed to outsource the construction and operation of the project to CNPC-controlled Southeast Asia Crude Pipeline Co Ltd.
“The agreement also stipulates that Myanmar government shall ensure the company’s ownership and exclusionary right to the pipeline and guarantee the safety of the pipeline,” the company statement said.
The pipeline is to extend from Madeira on the western coast of Myanmar; run through Rakhine, Magway, Mandalay and Shan states; and enter China at Ruili in Yunnan province.
It is to have an annual delivery capacity of 12 million tons in its first stage.
The pipeline would allow China to shorten oil deliveries from the Middle East by cutting out the need for oil tankers to travel through the Malacca Straits.
Xi witnessed the signing of 16 agreements during his two-day visit to Myanmar Saturday and Sunday.
Four of the agreements were between the two governments and the remaining 12 were between private companies.
China is Myanmar’s fourth-largest foreign investor with a total investment of 1.3 billion dollars. Bilateral trade between the two neighbours reached 2.6 billion dollars in 2008.