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China and Myanmar have finally reached an agreement on an oil pipeline that that would allow China to import crude oil from overseas via Myanmar, and the project is slated to open “very quickly”, according to Chinese Vice Foreign Minister Liu Zhenmin.
An oil refinery in the city of Kunming in China’s southern Yunnan province is complete and ready to receive crude oil via the pipeline, Reuters quoted Liu as saying on Monday.
A couple of weeks ago, the launch of the oil pipeline had been postponed again despite talks of imminent start-up, because the project was awaiting final approvals and permissions for tankers to enter Myanmar waters.
PetroChina and Myanmar’s government had yet to finalize the deal for the 480-mile-long pipeline set to carry oil across Myanmar to the landlocked southern Chinese provinces neighboring Myanmar, Reuters reported back then, citing a source with the Myanmar government.
In addition to this finalization hurdle, PetroChina had not yet obtained permission from Myanmar’s Navy for tankers to enter ports in the country, according to Reuters’ government source familiar with the matter.
The $1.5-billion oil pipeline—conceived some ten years ago and completed late in 2014—has not been used due to strained relations between Myanmar and China and its inability to obtain final authorizations.
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Earlier in March, the pipeline was said to be nearing imminent launch as the two countries settle their differences regarding the terms of the oil transport project.
The crude is to be supplied to PetroChina’s brand new refinery in the Yunnan province, where test production is scheduled to start in June.
The oil pipeline via Myanmar would be strategically important to China as it would allow it to have an alternative supply route to the ones for imports of oil from the Middle East and Europe that cross the crowded shipping route of the Strait of Malacca and Singapore.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.