China, Burma to build cross border gas pipeline

http://www.mizzima.com/news/inside-burma/1906-china-burma-to-build-cross-border-gas-pipeline.html

by Mungpi
Friday, 27 March 2009 21:09

New Delhi (Mizzima) - China and Burma on Thursday signed four contracts, which included the construction of a cross border oil and gas pipeline, Burma’s state-run media said.

The New Light of Myanmar, Burma’s official newspaper on Friday reported that the Burmese Energy Minister Brig-Gen Lun Thi and Head of China’s National Energy Administration, Mr. Zhang Guobao signed a cooperation agreement on the Sino-Burma Oil and Gas pipeline.

The other contracts include a framework agreement on Development of Hydropower Resources in Burma by China, a Memorandum of Understanding on Buyer’s Credit for Construction Projects between the Export-Import Bank of China and the Ministry of Finance and Revenue of Burma. Both China and Burma also agreed on Economic and Technical Cooperation between the two countries.

The contracts were signed between Burmese and Chinese officials, who accompanied Li Changchung, member of the politburo of the central committee of Communist Party of China (CPC), during his visit to military-ruled Burma.

According to the Chinese central government website, the Sino-Burma cross border gas pipeline is designed to link a port city in Burma with Kunming, capital of southwest China's Yunnan Province.

According to a Reuters report, Yunnan is to start construction of the pipeline in the first half as part of its 72 billion Yuan (S$15.9 billion) worth of energy projects this year.

The pipeline, according to a Sino-Burmese analyst Aung Kyaw Zaw, is strategically important for China as it could cut down on the detour of oil cargoes through the congested Malacca Strait and also strengthen China's access to Burma’s rich energy reserves.



Burma in December awarded China the right to buy oil from its offshore block–A gas field in the Bay of Bengal for a period of 30 years.

Aung Kyaw Zaw said Li’s visit to Burma, which is part of a four-nation tour, could also be to push Burma to implement the agreement.

“China is worried that Burma is delaying work on the gas pipeline construction,” said Aung Kyaw Zaw.

Li, during his visit to Burma, met several officials including the junta supremo Snr. Gen Than Shwe, and exchanged views on developing good-neighbourly and friendly ties between China and Burma, according to the Burmese state-run paper.

Western nations particularly the United States and the European Union have imposed stringent economic sanctions on Burma, restricting its companies from investing in the country.

But China, which has raised its voice against western sanctions on Burma, has been investing in Burma and has signed several contracts for business deals.