China National Petroleum Corporation (CNPC) signed an agreement with Burma’s Ministry of Energy regarding the 2,380-kilometre oil pipeline between the two countries. The agreement defines the rights and obligations of the Southeast Asia Oil Line, a CNPC subsidiary, in construction and operation of the pipeline. The pipeline will be from Madel Island of Burma to Yunnan Province in China and will transport over 22 million metric tons of crude oil a year.

The Burmese authorities will be responsible for the security of the pipeline, which will run through areas in north-eastern Burma, inhabited by armed ethnic groups. China also plans to set up an oil refinery in Kunming, the capital of Yunnan province in southwestern China.

The new pipeline is expected to be constructed in two phases. With an initial capacity of 241,000 barrels per day (bpd), the flow rate will rise to 402,000 bpd after the second phase of development. Myanmar Oil and Gas Enterprise will hold 49.1 per cent in the project while CNPC will have 50.9 per cent stake.1

• 1. ‘China-Burma agree on oil pipeline project’, Asia Energy, December 30, 2009 at http://asianenergy.blogspot.com/search?updated-min=2009-01-