China-Myanmar pipelines completed

The long-awaited China-Myanmar oil and gas pipeline project has been completed, the builder and operator of the pipelines, China National Petroleum Corp (CNPC), said Tuesday.

"This project could diversify China's oil and gas import channels so as to guarantee the country's energy safety," said Zhou Dadi, a professor at the Energy Research Institute under the National Development and Reform Commission (NDRC).

Lin Boqiang, director of the Center for Energy Economics Research at Xiamen University, said that oil transported along the new pipeline can take a shorter route than "the current long journey through the congested Strait of Malacca."

The two countries signed an agreement to build the project in March 2009.

In addition to its strategic significance for the country's energy safety, the project could also ease the problem of shortages of oil and gas in Southwest China, including Yunnan, Guizhou and Guangxi, Zhou noted.

Before the China-Myanmar project, China had oil and gas import pipelines mainly covering West, Northeast and East China, such as the China-Kazakhstan oil and gas pipeline project, China-Russia oil pipeline project and China-Turkmenistan gas pipeline project.

The project will transport oil and natural gas via Kunming, capital of Yunnan, and extend to Guiyang, capital of Guizhou, and Nanning, capital of Guangxi, as well as Chongqing.

Domestic oil prices are unlikely to be impacted by the China-Myanmar pipeline, as "the project will have a limited impact on international crude oil prices, which are the basis of calculations by the NDRC in adjusting domestic retail oil product prices," Zhou said.

The project will not lead to lower domestic prices of natural gas due to the high cost of transportation, Lin noted.

Media reports said that natural gas transported via the Myanmar pipeline is expected to cost around 3.5 yuan ($0.51) per cubic meter.

Currently, gas for residential use is about 2 yuan a cubic meter in gas-rich regions like Xinjiang Uyghur Autonomous Region, but it costs 3.86 yuan in gas-poor Guangxi.