XarxaAsia

From the Chennai Centre for China Studies (B.Raman):

Myanmar has allowed Chinese companies to construct two pipelines connecting the Arakan coast with Yunnan—-one for oil and the other for gas. While the oil pipeline will start from Sittwe, it is not yet clear from where the gas pipeline will start. Most probably, from Kyaukpu. Both the pipelines will be used to transport part of China’s imports of oil and gas from West Asia and Africa in order to reduce the dependence on the Malacca Strait. Subsequently, these pipelines will also be used to transport any oil or gas that may be discovered by the Chinese companies to whom contracts for exploration in the Arakan area have been awarded.

On April 21,2006, the “Shanghai Security News”, quoting what it described as well-informed sources, had circulated the following report: “The plan to build a crude oil pipeline between Burma and China has been shelved because of viability concerns. The pipeline was vetoed for its poor economics, insiders say. Burma produces no oil and building a transit pipeline is not viable in economic terms. On the other hand, if constructed, the pipeline’s capacity would account for merely 10% of the oil shipments currently passing through the Malacca Strait, which would not go far in solving the country’s energy supply security concerns.”

Now, after a year, the SINOPEC, as quoted by Hsinhua, says that the oil pipeline has been approved and that the construction will start this year. What has made this pipeline, which was considered as not viable in April last year, viable now? If the Myanmarese authorities have allowed the Chinese to construct an oil pipeline from Sittwe, what happens to the Indian proposal for a gas pipeline from the same place? Is it confirmed that the Myanmarese authorities have decided to sell the gas produced in the two blocs awarded to a consortium of Indian and South Korean companies to China, as reported by some sections of the media? If so, what happened to the Indian and South Korean proposals to purchase this gas?