• 5 minutes 'No - Deal Brexit' vs 'Operation Fear' Globalist Pushback ... Impact to World Economies and Oil
  • 8 minutes China has *Already* Lost the Trade War. Meantime, the U.S. Might Sanction China’s Largest Oil Company
  • 12 minutes Will Uncle Sam Step Up and Cut Production
  • 8 hours Maybe 8 to 10 "good" years left in oil industry * UAE model for Economic Deversification * Others spent oil billions on funding terrorism, wars, suppressing dissidents, building nukes * Too late now
  • 4 hours OPEC will consider all options. What options do they have ?
  • 31 mins Recession Jitters Are Rising. Is There Reason To Worry?
  • 14 hours Russia Accuses U.S. Of Stoking Tensions With Missile Test
  • 5 hours What to tell my students
  • 5 hours CLIMATE PANIC! ELEVENTY!!! "250,000 people die a year due to the climate crisis"
  • 18 hours With Global Warming Greenland is Prime Real Estate
  • 6 hours NATGAS, LNG, Technology, benefits etc , cleaner global energy fuel
  • 9 hours TRUMP'S FORMER 'CHRISTIAN LIAISON' SAYS DEEPWATER HORIZON DISASTER WAS GOD'S PUNISHMENT FOR OBAMA ISRAEL DIVISION
  • 1 hour Trump vs. Xi Trade Battle, Running Commentary from Conservative Tree House
  • 1 day In The Bright Of New Administration Rules: Immigrants as Economic Contributors
  • 21 hours Get First Access To The Oilprice App!
  • 10 hours Flaring is at Record Highs in Texas
Alt Text

This Supermajor Is Leading The Energy Sector

This supermajor has been standing…

Alt Text

What The Market Is Overlooking In The Occidental Deal

Occidental Petroleum has caught a…

Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Premium Content

China's Back-Door Natural Gas Supply

One of the most critical changes in global energy flows we've seen for years happened this week.

China inaugurated one of its boldest pipeline projects in recent memory. A 2,500 kilometre pipe to carry natural gas and oil from the Indian Ocean across Myanmar in southeast Asia and into southwest Yunnan province.

The gas portion of the line became fully operational this week, according to China National Petroleum Corp (CNPC). The line is expected to carry over 1 billion cubic feet of gas per day into China. The twin oil line is expected to follow.

This massive development has several key implications for the global energy balance.

For one, it means that Myanmar's significant offshore natural gas reserves (and growing production) now have a "go-to" market.

This could mean less natgas supply for other consumers in the region. Possibly the reason why fellow Myanmar gas user Thailand said this week that it wants to make coal its official fuel of choice going forward, moving away from natural gas.

It also shows that China is committed to diversifying its natural gas import base. As one of the highest payers for LNG imports on the planet, China needs all the gas it can get. And "back door" supply options like the Burmese pipeline are going to be a focus.

Finally, the oil segment of the pipeline has the potential to re-make the crude shipping business. The line is expected to deliver over 22 million barrels yearly, or about 440,000 barrels per day into China. Most of this will be tanked oil, offloaded at Myanmar for transit through the pipe.

This means that major crude shippers like the Middle East will now have a much shorter journey to get supply to China. They will also be able to avoid traversing the perilous and congested Straits of Malacca, between Malaysia and Sumatra.

This gives China a leg up in the race to secure oil supply. Oil sellers around the Indian Ocean may start favouring the Chinese market over longer-distance routes like Japan and South Korea. Currently those buyers receive about 75% of their crude through Malacca.

We'll see what the final effects are. But this is a development that could cause all kinds of shake up.

Here's to coming in the back,

By. Dave Forest




Download The Free Oilprice App Today

Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play