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Myanmar-China Oil Pipeline Start-up Delayed

Pipeline

Despite recent talks of imminent start-up, the launch of an oil pipeline that would allow China to import crude oil from overseas via Myanmar has been postponed again, awaiting final approvals and permissions of tankers to enter Myanmar waters.

PetroChina and Myanmar’s government have 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 on Friday, citing a source with the Myanmar government.

In addition to this finalization hurdle, PetroChina has 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.

Earlier this week, the pipeline was said to be nearing imminent launch as the two countries settle their differences regarding the terms of the oil transport project.

But now there is no exact date for the pipeline start-up at present, the source within the Myanmar government told Reuters, noting that PetroChina was “trying to push to get the permission from the navy to enter Myanmar water”.

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.

Related: OPEC Out Of Moves As Goldman Sachs Expects Another Oil Glut In 2018

According to shipping data by Thomson Reuters Eikon, the supertanker that has been chartered to ship the first oil for the Myanmar-China pipeline from Azerbaijan has been sitting offshore Sri Lanka.

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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