China-Burma Pipeline Big Game

After nearly four years of harassment, China-Myanmar oil pipeline project appears to be launched in the second half of the year.
On June 26, PetroChina announced the signing of a memorandum of understanding with the Myanmar Federal Government and the Daewoo Consortium on the Memorandum of Understanding for the Sale and Transportation of Natural Gas in Blocks A1 and A3 on the Myanmar Sea. This marks the transition of the Sino-Myanmar cross-border gas pipeline project to the official implementation stage.
According to the cooperation agreement finalized by the three parties, Myanmar will sell gas to China through a gas pipeline. This pipeline will enter Kunming from Burma to solve the problem of gas supply that has long plagued China's southwest region.
According to informed sources, the current plan has been established to build a gas transmission pipeline from Burma's Sittwe Port, through the Yunnan, Guizhou, and Guangxi provinces and regions, and finally to connect with the Second West-East Gas Pipeline. The pipeline has an annual gas transmission volume of 10 billion cubic meters. The gas source is mainly from Myanmar and is expected to be completed in 2010. Since oil pipelines involve many Southeast Asian countries, and there are many interests to balance, pipelines are still in the stage of demonstration, and gas transmission pipelines will go ahead.
The key to the implementation of this gas transmission pipeline is the fact that the industry has been discussing whether it is possible to establish a transnational oil and gas pipeline between China and Myanmar, thereby changing the situation that China's crude oil imports from maritime transport are too dependent on the Malacca Strait.
“People (about the energy transportation in the Straits of Malacca) are not worried. Suppose a country has blocked China’s oil-swept Malacca throat, which means that its relations with China are highly strained. It can block Malacca and why it cannot be in the Strait of Hormuz. In the Indian Ocean, is it intercepting oil tankers?” Han Xiaoping, CEO of China Energy Network, asked in reverse: “I believe that China’s oil supply system should be established through multiple channels, methods, and sources. Simply expecting to resolve the Malacca issue will ensure that China’s energy security is not. Practical."
International practice: When a country’s oil dependence on foreign countries exceeds 50%, it is necessary to consider how to ensure the safety of oil supply. After China’s net oil imports exceeded 60 million tons in 2000, relevant government agencies such as the domestic academic community and the oil industry have conducted multiple demonstrations and investigations on how to establish their own energy security system.
Around the year 2000, Luo Ping, director of the Transportation Planning Research Office of the Institute of Comprehensive Transportation of the National Development and Reform Commission, participated in the first argument to guarantee the strategic security of petroleum. Han Xiaoping's point of view coincided with this.
1. Bypassing Malacca “At that time, from the perspective of establishing a multi-channel approach, we proposed to build a pipeline from Myanmar’s Sittwe Port to China.” Luo Ping said: “It has the advantage of being able to bypass the Strait of Malacca and reduce the impact on the tanker that leads to China. The possibility of a pirate attack There were many incidents of pirate attacks on tankers in the waters near the Malacca Strait in 2004. Because tankers had to reduce speed when they passed through the strait, this gave pirates an opportunity. At the time, we did not consider the energy supply under war conditions. safe question."
However, due to various reasons, Luo Ping et al.'s plan has always stayed at the academic discussion stage, and since 2004, the main participants in the discussion were Yunnan scholars.
According to public information, Myanmar Sittwe Port is located on the east coast of the Bay of Bengal, about 1,100 kilometers from Kunming, Yunnan. It is a very good deep-water port and can build 200,000-ton oil tankers. From the construction of oil pipelines here, crude oil in the Middle East can bypass the Straits of Malacca and be sent directly to the country.
"Even if this pipeline can only meet 20 million to 30 million tons of annual oil transmission capacity, it can meet the needs of the southwestern market, so that it will not cause other social problems due to tight supply of refined oil," said Yunnan Academy of Social Sciences experts.
At present, the consumption of refined oil in the three provinces of Yunnan and Guangxi is between 12 million and 16 million tons each year, all of which rely on Sinopec’s southwest oil product pipeline and CNPC’s Lanchengjing product pipeline, which are transferred from South China and Northwest China. This not only increases transportation costs, consumes a lot of storage and transportation facilities, but also inhibits the development of the local economy.
It is understood that due to the low oil reserves in the three provinces of Guizhou and Guangxi and the lack of sea transportation facilities, there are no large-scale oil refining facilities in the region. Once the oil pipeline is completed, it will certainly drive the development of the local oil refining and chemical industry.
In the strategic cooperation agreement signed between PetroChina and the Yunnan Provincial Government in December 2007, CNPC has promised to build a 10 million-tonne refinery in the region. The issue of Malacca has once again become the focus of the public.
“Our country’s oil imports are increasing, and more than half of the imported oil must reach the country through the Malacca Strait. Therefore, it is necessary to guarantee the safety of this oil passage.” Some central government officials pointed out: “Not to mention the current Southwest China Without large refineries, the consumption of refined oil is mostly dependent on imports from the eastern provinces. Therefore, the completion of oil pipelines and refineries will better meet the demand for refined oil in the region."
According to data provided by relevant agencies, in the past, CNPC transported Sudan crude oil through the Straits of Malacca to refineries in the north and transported the refined oil products to the southwest region where oil was short of oil; once the refinery in Yunnan was put into production, transportation costs would be reduced by 200 yuan. / Ton or more.
The above experts pointed out: "Even if it is to get rid of, or at least reduce, the reliance on it, it is very necessary to build a pipeline from the Bay of Bengal to China."
Since becoming a net oil importer in 1993, China has become the world’s second largest oil importer and consumer. According to related statistics, in 2007 China’s net crude oil imports exceeded 160 million tons, and its foreign dependence has exceeded 50%, of which oil from the Middle East and North Africa accounted for more than half of total imports. At present, these crude oils need to reach the country through the Straits of Malacca, which makes Malacca the throat of China's oil imports.
2. Gas pipelines leading the Malacca Strait Located in the northern part of the Indian Ocean, between the Malay Peninsula and Indonesia's Sumatra Island, the Strait of Malacca is a long, narrow channel connecting the South China Sea and the Andaman Sea. It has become an important channel for communication between the Pacific and Indian Oceans in the southern Sunda Strait and the Makassar Strait. It is also an offshore hub between Asia, Africa, Europe, and Oceania. Its transportation location is very important. It has always been known as “Eastern Gibraltar”. Said.
It has a total length of 1,185 kilometers, a width of 370 kilometers northwest, and a width of 37 kilometers at the narrowest point of the southeastern opening. The navigable waterway is generally 13.5 kilometers wide, and the narrowest point is only 2 kilometers. It can open four cargo ships at the same time. The general depth of the channel is 25-113 meters, increasing from southeast to northwest.
It should be noted that when some large displacement vessels, especially large oil tankers, pass through here, the bottom of the ship is only a dozen or even a few meters away from the seabed. In the event of a sinking accident, Malacca’s shipping channel will at least be blocked for about a week.
In fact, in August 2004, Wu Lei and other energy experts from Yunnan University put forward the “Suggestions on the Construction of Burmese Oil Pipeline from Myanmar to Kunming” and used “China-Myanmar oil pipeline” to crack down on the “Malacca dilemma” in China.
However, the construction of a new oil pipeline will bring foreign oil from abroad to China through Burma. Many practical problems are encountered in the operation. It is relatively easy to build a gas pipeline from Burma to Kunming, so "China-Burma Gas Pipeline" first landed.
According to the above-mentioned insiders, PetroChina plans to build a gas transmission pipeline from Burma's Sittwe Port. The new natural gas transmission process may follow the previously designed route of crude oil pipeline transmission with a total length of more than 1,000 kilometers from Myanmar's second largest city, Mandalay. It was transported to Kunming via Ruili City. After Yunnan, Guizhou, and Guangxi provinces and regions, they eventually networked with the Second West-East Gas Pipeline. The pipeline has an annual gas transmission volume of 10 billion cubic meters. The gas source is mainly from Myanmar and is expected to be completed in 2010.
The Yunnan Provincial Oil Products Industry Association stated that the gas pipeline is the crude oil transportation pipeline between China and Myanmar.
"In World War II, Japan completely closed all ports on the southeastern coast of China. It was the China-Myanstan oil pipeline (then known as the Stilwell Pipeline) that ensured China's oil supply. Now we have the remains of that pipe. Li Dongwei, Deputy Minister of Yunnan Baoshan Propaganda Department, told reporters.
On June 20, Liao, the deputy general manager of PetroChina, and Myanmar’s federal government and the Daewoo consortium (composed of two South Korean companies and two Indian companies) signed the “Natural Gas of Blocks A1 and A3 on the Myanmar Sea” in Naypyidaw, Myanmar. The Memorandum of Understanding for Sale and Transportation, the Cooperation Agreement between China, Myanmar, Korea, and India on the feasibility study of natural gas pipelines on land, and the entrustment of China Petroleum Corporation, South Korea and South Korea to commission the China Petroleum Planning Corporation to carry out feasibility studies on natural gas pipelines protocol".
China Petroleum also disclosed that Myanmar, China, the Republic of Korea, India, and other countries also signed agreements on six countries including China, Myanmar, South Korea and India to carry out joint feasibility studies on land-based natural gas pipelines. The six parties entrusted CNPC Planning Institute with responsibility for the agreement. Implementation of feasibility studies on land-based natural gas pipelines.
Data from the Myanmar Ministry of Commerce show that Burma's natural gas reserves are the tenth in the world, and the identified natural gas reserves are 254 billion cubic meters, and the known crude oil reserves are 3.2 billion barrels. In recent years, Myanmar annually produces more than 40 million barrels of crude oil and more than 8 billion cubic meters of natural gas, and exports more than 5 billion cubic meters of natural gas.
According to the reporter's understanding, the operations of the Sino-Myanmar oil and gas pipeline project are planned and operated by PetroChina, Yunnan Province, and Myanmar-related oil companies. In reality, this is a national-level project between the governments of China and Burma. The preparatory work for the project can be said to be basically ready, but it is also necessary for the National Development and Reform Commission to approve the project after approval of the State Council. At present, the reporter has not received any news from the National Development and Reform Commission.
3. Malacca Complex Some scholars believe that the opening of China-Myanmar oil pipelines can greatly reduce the threat to China's oil transportation corridors.
"If you enter the war situation, the other party can block Malacca. Why can't you intercept your tanker on the Strait of Hormuz and the Indian Ocean?" Han Xiaoping said, "If you think of problems like this, building a pipeline will not make sense. Moreover, Malacca is not just China. The oil transportation throat is also a bottleneck for countries such as Japan and South Korea. In the international political game, one cannot only consider unilateral factors."
However, why do we have a "Malacca complex"?
On March 5, 2007, the Chinese naval missile frigate "Lianyungang" and "Sanming" sailed to Karachi, the southern port of Pakistan, after a 5,000-mile voyage over 15 days. The route is to sail from Ningbo Port and reach Karachi after the South China Sea, the Strait of Malacca, and the Indian Ocean.
It is worth noting that the route of this itinerary is the busiest section of China's merchant shipping, especially large ocean tanker ocean-going transportation.
A high-level Sinopec consulting company interviewed by reporters said that the distribution of world oil resources is mainly concentrated in the Middle East, North Africa, Central Asia, Russia and North America, of which the Middle East and North Africa are the most oil reserves, accounting for proven reserves. With 68% and 30% of the proven reserves, only Saudi Arabia and Iraq’s proved oil reserves accounted for 25.5% and 10.8% of the world respectively. "This situation makes it impossible for China to completely get rid of its dependence on oil in the Middle East and North Africa. Therefore, it is necessary to protect the Middle East - Indian Ocean - Malacca - South China Sea - China route."
The person pointed out that in recent years, as the international oil prices have skyrocketed, it seems that China is paying more attention to the "harm" of high oil prices to the Chinese economy. "In fact, this view is somewhat partial. China's oil security strategy should include two aspects, namely, stable supply channels and a stable cost structure. Oil prices are only cost components, while supply channels include the control of oil sources and the control of transport channels. ."
In recent years, Chinese oil companies have gone to oil and gas rich areas in the Middle East, North Africa, South America, and Russia to participate in local oil and gas development, which is a manifestation of the protection of oil source control rights. On the other hand, the construction of the China-Burma oil pipeline and China-Myanmar oil pipelines and the voyage of naval vessels to the Indian Ocean along the Malacca are intended to establish safe and stable transportation channels.
In particular, the oil pipeline, once it is determined, means that the resources of the oil source will be sent to the consumer market reached by the pipeline, which is very exclusive. “So in recent years, our oil companies attach great importance to the construction of overseas oil pipelines. , and formed a centripetal circle around China in the planning."
It is understood that the oil pipelines currently under construction and proposed to be built into China’s territory include the Sino-Kazakhstan oil pipeline from the northwest, the northern China’s Tainan oil pipeline’s China branch from the north, and the southwest direction leading to China’s China and Burma oil pipelines.
Calculated oil capacity has only been announced. After all the above pipelines are completed, they will be able to provide China with more than 50 million tons of oil per year, accounting for more than one-third of China’s total oil imports, plus the intensive transportation of oil on the southeast coast. With regard to ports, terminals, storage and transportation facilities, China will have the ability to receive crude oil from all regions of the world in all directions.
“Our country’s oil security strategy is based on multi-channels, multi-modes, and multi-sources. The Malacca complex is just one part of it. Even if there is a problem in the Straits of Malacca, oil tankers from the Middle East and North Africa can also use the Sunda Straits in the south. And the Makassar Strait arrived in China.” The above-mentioned executives of the Sinopec Consulting Company believe that: “Once the Sino-Myanmar oil pipeline is put into operation, its purpose will mainly be to meet the needs of the southwestern market and does not have special significance.”
4. The hope of the private oil companies is actually more than PetroChina and Sinopec are concerned about Malacca, and the private oil tycoon, Gong Jialong, once put its final hope on the “Malacca Complex”.
Gong Jialong once told Li Jun, president of Hejun Consulting, that the Malacca Strait is a bottleneck in China's oil transportation. In order to resolve this critical situation, he intends to contact private entrepreneurs to open up petrochemical parks and build 10 million tons of oil refining in Pakistan, which has a very good relationship with China. The factory then returned the product oil through the oil pipelines to the domestic market and sold it to the private oil companies that were waiting to be provided.
"Because of the good relations between China and Pakistan, Musharraf promised at the time that a petrochemical park would be built in the Gwadar port on the Indian Ocean off the coast of Pakistan for Chinese oil companies to develop the petrochemical industry. This made us very excited." Li Su said: " For Pakistan, this is also a win-win result. If it can really attract funds to build a petrochemical park, the promotion of the local economy is self-evident, and Musharraf certainly welcomes us."
However, is this solution feasible?
“It is a project that PetroChina has rejected because Gwadar port is adjacent to the Indian Ocean, but it is very difficult to build an oil pipeline to the country, either because it is not allowed by geological conditions or when it is necessary to transit across many countries. There is no way to protect the strategic safety of the oil," said the high-level Sinopec consulting company.
With the arrest of Gong Jialong at the end of 2006, the hope of private oil companies to enter Gwadar Port eventually became a bubble.

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