The China-Myanmar gas and crude oil pipelines

As the world media continues focusing on Rohingya crisis in Myanmar, its giant neighbor China maintains its aloofness nonetheless full scale utilizing the fuel pipelines originated in the trouble torn Arakan (also known as Rakhine) province of western Burma (former name of Myanmar).

The China-Myanmar gas and crude oil pipelines, connecting Kyaukphyu port of Rakhine-lately in the media for the gory clashes between majority Buddhists and Rohingya Muslim settlers with the Kunming city in south-western part of China started loading consignments since May 2017.

The pipeline is designed to shift crude oil from the Middle East and Africa through Myanmar with an aim to feed the world’s second biggest oil consumer nation.

Now the Chinese authority in Beijing no longer needs to depend on the troublesome cargo shipping through South China Sea (around 5,000 km sailing) for its crude oil imports for the China National Petroleum Corporation (CNPC) run refineries in Yunnan.

The 770 kilometre (480 mile) long China-Burma pipelines (inside Myanmar), owned and built by Beijing with the budget of USD 1.5 billion under its One Belt, One Road policy is expected to transfer
around 22 million tons of crude oil annually (around 442,000 barrels a day). The pipeline is expected to shift nearly 6% of China's total imports (as per year 2016 record).

A joint venture of CNPC (with 50.95 percent stake) and Myanmar Oil and Gas Enterprise (MOGE, 49.1 %), the pipelines almost divide Myanmar.

The country in desperate need of financial supports can claim a road-right fee of US $13.81 million for both the pipelines annually along with a transit fee of $1 per ton of crude oil under a 30-year agreement. Moreover, Myanmar can take 2 million ton crude oil annually from the line for its consumption.

The agreement between the two neighbouring countries to build the pipelines from the Bay of Bengal to China’s Yunnan province was signed in 2009 and subsequently the works started next year. The 793 km (493 mile) natural gas pipeline was already made operational by 2015 with the transmission capacity of 12 billion cubic meters annually from the Shwe offshore field.

The oil pipeline, parallel to it across Myanmar, was also planned to get started in the same year, but because of political differences between the two countries and also public resistances delayed its
operation. The activists continue claiming that over 20,000 indigenous people were losing their livelihoods because of confiscation of arable lands for the project.

The early 2017 visit of Myanmar President Htin Kyaw to Beijing witnessed the signing of an operational agreement in presence of Chinese President Xi Jinping on 10 April. The most trusted ally of Daw Aung San Suu Kyi, one who runs the democratically elected National League for Democracy (NLD) government as a de-facto chief, committed to make the oil pipeline operational at the earliest.

The strategic relationship between China and Myanmar lately emerges triumphant, but it may be noted that both the enjoyed a trusted diplomatic relationship since long back. The then a semi-democratic government in Yangon (formerly Rangoon) recognized the People’s Republic of China in 1949 soon after the Chinese Communist Party led by Mao Zedong emerged victorious in all battle fronts. Later both the countries established a formal diplomatic relationship in 1950.

It was followed by the anti-Chinese uprising in 1967, when the agitating Burmese people targeted the Chinese embassy in Rangoon. The Communist Chinese government took hard stand against the General Ne Win led Burmese regime. Later when the southeast Asian country went under complete military rules, the tie with Beijing improved visibly by Eighties.

After 08-08-88 Burmese uprising that collapsed Ne Win’s regime and paved the way for the military junta to rule the country, the China became friendlier to Burma as the international community started isolating the Gen. Than Swe led regime. The military dictators rejected the outcome of 1990 general elections, where Suu Kyi’s NLD won landslide victory and even put the Nobel peace laureate under house arrest.

Slowly Myanmar became more dependent on China and it continued till a quasi-democratic government took the power at Naypyitaw (Myanmar’s new capital) in 2011.

The former Myanmar President Thein Sein, who took some strong decisions against China including the suspension of the Beijing-owned Myitsone hydropower project in Kachin province, tried to build closer ties with the Europe and USA. The relationship survived with the initiative of Myanmar’s State counselor and foreign minister, Suu Kyi again.

Meanwhile, oppositions to the project surfaced as the Myanmar-China Pipeline Watch Committee warned that oil spills could severely affect the land and coastal ecosystem harming the livelihood of thousands of Myanmar residents. The umbrella body of local community-based organizations urged the authority to adopt efficient measures to prevent oil spills along the pipeline.

The rights body also raised voices for the Burmese farmers, who handed over their arable lands to the project authority, but yet to receive the compensations. Both the pipelines are laid in parallel through the under-developed country and the affected villagers were assured adequate compensations by the Chinese authority, but it has not turned into reality, added the forum.

Of course, the CNPC claimed that the project was materialized keeping an eye to the environment protection and land restoration.

Moreover, emphasis was given on community development activities like building of schools, hospitals, roads, bridges, power & water supply, telecommunication arrangements etc for the benefit of affected families across Myanmar.

Earth Rights International (ERI), a nongovernmental & nonprofit organization combining the power of law & people in defense of environment & human rights expressed happiness that the Chinese investors had succeeded in operating the projects after some delays.

However it argued that ‘there are still some major issues waiting to be solved, such as land compensation to communities, safety concerns, and ecological restoration at the project site.’

"The CNPC as one of the main investors should keep their commitment to health, safety, and the environment and solve these problems with the effective consultation with local communities,” said Valentina Stackl, communications manager of USA based ERI while responding to Asia Sentinel’s queries.

She also added that when Myanmar was under the military government, the affected communities had no choice but to remain silent even their legal rights were seriously violated. After the election of the NLD, more and more communities have started to standing up for their rights, not just on projects with Chinese investors, but all potential delinquent investors, stated Valentina.

Lately, the justified demand for its own share of benefits started rising as a public representative of Myanmar’s Shan province came out with raising voices that the benefit (in terms of annual revenue) of the pipelines should go to his province government too.