Construction of the China-Myanmar oil pipeline is expected to start this year, Chinese oil giant Sinopec has announced.

At the beginning of April, the National Development and Reform Commission (NDRC) approved the Sino-Myanmar oil pipeline linking Myanmar's deep-water port of Sittwe with Kunming, capital of China's southwestern Yunnan Province.

No timetable for the completion of the pipeline has been provided.

In the meantime, China will invest eight billion yuan (1.04 billion U.S. dollars) to build a gas pipeline, which stretches 2,380 kilometers, linking Myanmar with Kunming.

This pipeline will transport 170 billion cubic meters of natural gas from the Middle East to southwest China in the next 30 years.

Myanmar, in return, will get a loan of 650 million HK dollars (83 million U.S. dollars) from the Chinese government to tap its oil resources.

In January, China National Petroleum Corp. (CNPC) signed production sharing contracts with Myanmar's Ministry of Energy covering crude oil and natural gas exploration projects in three deep-water blocks off the western Myanmar coast.

The CNPC later launched a feasibility study with the Myanmar Oil and Gas Co..

The long-awaited pipeline would provide an alternative route for China's crude imports from the Middle East and Africa.

The plan has won support from local governments and enterprises.

Huang Qifan, vice mayor of Chongqing, said the CNPC had chosen Chongqing as the destination for the pipeline, noting the city would build a 10-million-ton capacity refinery to process imported crude, which is due to come on stream in three years.

Han Jingkuan, deputy director of the planning institute of PetroChina Company Ltd., said the government might also establish an oil refinery in Kunming.

China's three state-owned oil producers, Sinopec, CNPC and CNOOC, have stepped up projects in Myanmar, where their overall exploitation area has surpassed that of the Bohai Sea, said Han.

The pipeline might ease China's worries of its over-dependence on energy transportation through the Strait of Malacca, said an analyst.

Source: Xinhua