The Myanmar Times
Monday, 01 September 2014
The Myanmar Times
The Myanmar Times

Controversial pipeline to pump gas to China this week

The controversial pipeline that will ship natural gas from Rakhine State to China will begin operating this week, after an official opening ceremony at a control station in Mandalay Region on the evening of July 28, local officials said on July 26.

Farmers in Rakhine State examine a paddy field that is flooded near the pipeline to China. Photo: StaffFarmers in Rakhine State examine a paddy field that is flooded near the pipeline to China. Photo: Staff

This follows several weeks of testing in which there were no malfunctions or leaks, said a representative of two Chinese companies behind the dual pipeline.

Alice Pyr, a public relations representative for Southeast Asia Crude Oil Pipeline (SEAOP) and Southeast Asia Gas Pipeline (SEAGP) told The Myanmar Times on July 26 that testing had “gone well” and that health and safety inspections by Southeast Asia Gas Pipeline were completed “several days ago”.

Representatives of nongovernmental organisations opposing the project said residents of villages near the pipeline in Rakhine State had reported leaks during its testing phase. They said its operation would be delayed for a month or two as a result.

However, Minister of Energy U Than Htay was quoted in state-run media last week as saying testing was complete and that there were no problems with the pipeline.

The dual pipeline project will ship natural gas and crude oil from Rakhine State to China. The crude will be shipped to the state while the gas will come from offshore wells.

The pipelines have sparked protests over environmental and safety concerns. Protesters have also said the contract, which was signed under the military regime, should be revisited and that Myanmar should not export gas when three-quarters of the population lack electricity.

Daewoo announced the discovery of Shwe gas field in 2004. The then-military government

awarded purchasing rights to China in June 2008 under a deal that will see 6.5 trillion cubic feet exported to China over 30 years. SEAGP is the operator of gas pipeline from Kyaukphyu to Muse, a Myanmar border city. The cost of the 792.5 kilometre pipeline has been estimated at US$2.01 billion.

China National Petroleum Corporation has a 50.9 percent stake in the project. Two South Korean firms, Daewoo and Korean Gas Corporation, hold 25.04pc and 4.17pc respectively, while two Indian firms – Gas Authority of India Limited and Oil and Natural Gas Corporation – hold 4.17pc and 8.35pc respectively, according to a report by the Shwe Gas Movement, which opposes the pipeline. State-run Myanma Oil and Gas Enterprise owns 7.37pc of the project.

The gas pipeline is designed to transmit up to 12 billion cubic feet of natural gas a year, though it will initially transmit only 5.2 billion in the first phase, according to SEAGP.

The pipeline crosses Rakhine State, Magwe and Mandalay regions, and Shan State. Myanmar is set to earn revenues of US$30 billion over the next 30 years from the project, according to the Shwe Gas Movement.

U Wong Aung, a representative of the advocacy group, said protests against the project will continue even after the gas starts flowing.

“We are still receiving complaints from local people that land has been damaged or confiscated due to the pipelines. We have received thousands of complaint letters, but we have not received any commitment to address the complaints from the authorities,” he said.