The Myanmar Times
Friday, 28 November 2014
The Myanmar Times
The Myanmar Times

Group calls for review of pipelines

Workers oversee the laying of pipelines in Kyaukme, northern Shan State. Photo: SuppliedWorkers oversee the laying of pipelines in Kyaukme, northern Shan State. Photo: Supplied

Mandalay-based environmental group Seinyaungso has called on the government to halt an oil and gas pipeline project in the interests of the country.

The pipelines, which will run from Kyaukpyu in Rakhine State to Yunnan Province in China, are joint projects between China National Petroleum Corporation (CNPC) and Myanma Oil and Gas Enterprise (MOGE). However, Seinyaungso said ownership and management of the piplines was out of Myanmar’s control. Companies from South Korea and India are also investors in the natural gas pipeline.

“We have already studied the project from the east bank of the Ayeyarwady River to the Myanmar- China border. The project has many weak points for Myanmar. There’s no transparency, no environmental impact assessment and social impact assessment. The main weak point is that Myanmar has no chance to manage or own the project. CNPC will hold 50.9 percent of the project,” Seinyaungso leader U Tin Thit said on October 8.

“We are cooperating with other environmental groups and planning to collect signatures from the people for a petition calling on the government to reconsider the project,” he said.

“We should not allow another country [China] to totally control such a strategic project. The profit from the project is so huge for the other country. Myanmar should discuss management and ownership issues with the company [CNPC] again.”

Other environmental groups have studied the pipeline project from the west bank of the Ayeyarwady to Kyaukpyu, he said, adding that about 20 groups were involved in the monitoring project.

He said many lakes, creeks, roads and forest reserves had been negatively affected by the project, while residents were also upset over the different amounts of compensation paid for acquired land.

“[Farmers from] Namkhan on the Myanmar-China border told us that they got 240,000 yuan [K32.4 million] compensation for one acre but farmers in Tada-Oo, Natogyi, Taungtha, Kyaukpadaung and Yenangyaung got just K3.2 million for one acre … while farmers from Nanmate village in Namkhan got K22.26 million,” he said.

The oil pipeline is being a built at a cost of US$1.50 billion, while the estimated cost of the gas pipeline is $1.04 billion.

A spokesperson for the Friendship Association for the Myanmar-China Pipeline Project, a group established by the companies building the two pipelines to communicate with the media, said that while CNPC subsidiaries had 50.9 percent stakes in both pipelines, “management is decided by the board … which consists of representatives from all shareholders”.

The CNPC subsidiaries are also “under the supervision of [Ministry of Energy and MOGE]. All the issues decided by the board shall be approved by MOGE. In other words, this project is fully under control of Ministry of Energy,” the spokesperson said.

In terms of compensation for land, the spokesperson said the “compensation price shall be agreed and confirmed by the land owner themselves before signing the transition agreement and receiving the compensation. So I think there might be some misunderstanding there.”

She said the project would also have significant economic benefits and would employ thousands of Myanmar workers. More than half of the 8000 employees are Myanmar and this will rise in coming years, she said.

The Myanmar government will receive $13.8 million each year as a right of way fee, as well as transit fees for the oil and gas that goes through each pipeline. For the oil pipeline, this will be $1 a tonne, or about $20 million each year, she said.

“Besides those direct economic returns, the impressive dividend of the project to MOGE and tax income from the project can also add a fortune to Myanmar government. One more thing worth mentioning is that all the assets of the project shall belong to Myanmar government when the 30-year operation is over, if the shareholders won’t continue the project,” she said.

– Additional reporting by Thomas Kean