• 4 minutes China goes against US natural gas
  • 12 minutes WTI @ 67.50, charts show $62.50 next
  • 15 minutes Saudi Fund Wants to Take Tesla Private?
  • 3 hours Downloadable 3D Printed Gun Designs, Yay or Nay?
  • 1 hour Peak Oil is Now!
  • 14 mins Rattling With Weapons: Iran Must Develop Military To Guard Against Other Powers
  • 2 hours Russians hacking vs U.S., Microsoft President: Russians Targeting All Political Sides
  • 9 hours VW Receives Massive Order Of 1,600 All-Electric Trucks
  • 3 hours Corporations Are Buying More Renewables Than Ever
  • 16 hours Desperate Call or... Erdogan Says Turkey Will Boycott U.S. Electronics
  • 21 hours CO2 Emissions Hit 67-Year Low In USA, As Rest-Of-World Rises
  • 23 hours The EU Loses The Principles On Which It Was Built
  • 24 hours Film on Venezuela's staggering collapse
  • 20 hours Permian already crested the productivity bell curve - downward now to Tier 2 geological locations
  • 13 hours Batteries Could Be a Small Dotcom-Style Bubble
  • 23 hours Saudi PIF In Talks To Invest In Tesla Rival Lucid
Dave Forest

Dave Forest

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

More Info

Trending Discussions

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




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News