China's Asian Dream by Tom Miller;

Author:Tom Miller;
Language: eng
Format: epub
Publisher: Book Network Int'l Limited trading as NBN International (NBNi)
Published: 2019-02-26T16:00:00+00:00

GATEWAY TO THE BAY OF BENGAL

A few years ago, one focus of such resentment was the construction of twin Chinese oil and gas pipelines from the port of Kyaukphyu on Myanmar’s west coast, through Mandalay and Lashio, to the Yunnan border town of Ruili. CNPC provided compensation to farmers who lost their land, but some complained they had nowhere left to grow crops, while others accused CNPC of damaging the environment. Armed ethnic groups fought with government troops sent to protect the pipeline, forcing people to flee their homes.

The protests died down after the completion of the pipelines in 2013. That year, searching for the pipeline along the Burma Road, I caught glimpses of narrow strips of freshly dug farmland, scattered with white marking posts. Underneath the deep-red earth lay twin tubes of shiny steel, each about a metre in diameter. The Myanmar section of the US$2.5 billion project stretches for nearly 800 km, and then for a further 1,600 km through Yunnan province. From Kunming, the provincial capital, an extension pipeline pumps gas eastwards to the provinces of Guizhou and Guangxi. Another will send oil northwards to Chongqing, home to 30 million people, where China is building a second refinery.

CNPC began to pump natural gas from Myanmar’s offshore Shwe gasfield in 2013, under a thirty-year purchase deal that will deliver tens of billions of dollars to the Burmese government. The pipeline’s annual capacity is 12 billion cubic metres a year, though the actual flow reportedly fell far short of that in 2014 and 2015. The first oil was pumped on a trial basis in 2015, when a 300,000-tonne supertanker discharged at the newly opened deep-water port at Maday Island in Kyaukphyu. When the pipeline is fully functional, it will be capable of pumping 22 million tonnes of crude per annum—equivalent to about 4% of total Chinese demand in 2015.25 The Sino-Myanmar pipelines join those from Kazakhstan and Turkmenistan in delivering energy supplies overland, which Beijing deems vital for China’s energy security.

For Beijing’s strategists, the prize of gaining a western seaboard is the stuff of dreams. The oil and gas pipelines enable China to import energy supplies without requiring tankers from Africa and the Middle East to negotiate the narrow, pirate-infested waterway between Indonesia and Malaysia—the infamous Malacca Strait—which Beijing fears could be blockaded by the US Navy in a war. Three times as much oil passes through the Malacca Strait as through the Suez Canal, including roughly 80% of China’s own oil imports. Although the current capacity of the Myanmar pipelines is small relative to China’s vast energy needs, Beijing believes it goes some way to resolving the so-called “Malacca dilemma”.

China’s port at Maday Island is part of a broader plan to develop transport links to China from the Bay of Bengal. Efficient transport links from Kyaukphyu would enable China to import other raw materials directly, saving a journey of thousands of kilometres. In addition, establishing a trading hub there would allow firms from southwest China to export goods quickly and cheaply to India, Bangladesh and beyond.

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