Myanmar–China Oil and Gas Pipelines
Chinese Name: 中缅油气管道
Location: The Myanmar section of the pipeline stretches from Ramree Island (gas) and Maday Island (oil) in Kyaukpyu, Rakhine State, to Muse, Shan State
Type of Project: Energy
Project Developers: China National Petroleum Corporation
Main Contractors: China Petroleum Pipeline Engineering Co., Ltd.; Chuanqing Drilling Engineering Company Limited; Daqing Oilfield Engineering Co., Ltd.
Known Financiers: China Development Bank
Cost: 1.5 billion USD for the oil pipelines (Myanmar and China sections); 1 billion USD for the gas pipelines (Myanmar and China sections)
Project Status: In operation (operations commenced in October 2013 for the gas pipelines and June 2017 for the crude oil pipelines)
The Myanmar–China Oil and Gas Pipelines—the largest energy infrastructure in Myanmar—begin in Rakhine State, southwest Myanmar, transverse the country’s heartland, and enter Yunnan, China from the northeastern Shan State. Although this is Myanmar’s largest energy infrastructure project and a significant source of revenue for the country’s central government, the image of these pipelines has been marred by the absence of public participation in the development process, poor management of land and crop compensation, and alleged environmental destruction and pollution.
The four parallel pipelines span around 800 kilometres within Myanmar’s territory, beginning in Rakhine State, passing through the Magway and Mandalay regions, and crossing Shan State, where a wide array of ethnic minorities and armed groups reside. Transporting gas extracted from blocks A-1 and A-3 of the Shwe gas field off the coast of Rakhine, the gas pipelines start from Ramree Island, Kyaukpyu, and ultimately end up in Guigang, Guangxi Province in China. The oil pipelines deliver crude oil coming from the Middle East. Starting on Maday Island, Kyaukpyu, they go all the way to a refinery owned by China National Petroleum Corporation (CNPC) in Kunming, Yunnan Province.
The gas pipeline is owned by South-East Asia Gas Pipeline Company (SEAGP), while the oil pipeline is owned by South-East Asia Crude Oil Pipeline Company (SEAOP), both of which are controlled by CNPC through its subsidiary Southeast Asia Pipeline Company. Six companies from four countries jointly own SEAGP. CNPC holds 50.9% of the share, South Korea’s Posco Daewoo Corporation 25.041%, India’s Oil and Natural Gas Corporation (ONGC) 8.347%, Myanmar Oil and Gas Enterprise (MOGE) 7.365%, Gail (India) Limited (GAIL) 4.1735%, and Korea Gas Corporation 4.1735%. According to a high-level CNPC negotiator, the multilateral shareholding structure was designed to fend off anti-China sentiment.CNPC and MOGE hold 50.9% and 49.1% share of SEAOP, respectively.
The pipeline project is widely cited as China’s solution to the so-called ‘Malacca Dilemma’, as the Malacca Strait could be a choke point for China, with 80% of its oil imports passing through it. However, the oil and gas transported by the pipeline account for only a marginal share of China’s total imports. It is also important to note that the pipelines do not supply only China; they also provide gas to four offtake stations in Myanmar, enabling the establishment of new power plants connected to Myanmar’s national grid. The payments from the pipeline project are also a very significant source of revenue for Myanmar’s central government.
The pipeline project was initially conceptualised in 2004 by academics in Yunnan, and China’s central government started to conduct preliminary feasibility studies late that year. According to the former director of China’s National Development and Reform Commission, the heavyweight government agency responsible for economic planning, in 2005 Myanmar’s then Minister for Energy Brigadier General Lun Thi signed an MoU with China to strengthen energy cooperation between the two countries, and suggested that China consider building a gas pipeline along with the crude oil pipe.
In December 2008, CNPC signed an agreement with the Daewoo consortium to purchase natural gas from blocks A-1 and A-3 of the Shwe gas field for 30 years. During then Chinese Vice-President Xi Jinping’s visit to Myanmar in June 2009, CNPC signed an MoU with Myanmar’s Ministry of Energy on the development, operation, and management of the Myanmar section of the crude oil pipeline. On 3 June 2010, CNPC, MOGE, and the other shareholders of the project companies signed the shareholder agreements, and Myanmar Prime Minister Thein Sein and Chinese Premier Wen Jiabao announced the inception of the pipeline construction.The gas pipelines became operational in October 2013, and the oil pipelines in June 2017. By the end of 2019, China had imported about 26.9 million tonnes of crude oil and 24.6 billion cubic meters of natural gas through them.
Since the military coup of February 2021, popular resentment against the Chinese government has risen, due in part to longstanding distrust. Tepid official statements from China since the coup and failure to condemn the military violence have only served to further inflame local anger. This manifested in online threats by some social media users to blow up the pipelines. These threats have not been carried out, and business media have reported that crude oil supply along the pipeline to PetroChina’s Yunnan Petrochemical in Kunming remains steady, but a company source expressed concern about the potential future impacts of instability in Myanmar. The Chinese government apparently shares these concerns, and a document was leaked to the media in March containing minutes of a meeting between the Director-General of the Department of External Security Affairs under China’s Ministry of Foreign Affairs and Myanmar’s military regime seeking assurances that the pipeline would be protected. At least two Myanmar officials at the Ministry of Foreign Affairs were arrested by plain clothes police and taken away after the leak of this document.
- Land: The confiscation of land has been a central cause of popular protests against the pipelines. As early as 2009, Kyaukpyu residents complained that the authorities did not pay for the seized farmlands. A 2016 report by the Myanmar China Pipeline Watch Committee (MCPWC) documented that the working group in charge of planning the pipelines did not properly inform the farmers of the terms of land confiscation and that irregularities and inconsistencies existed in the land and crop compensation agreements. The report also discovered 102 cases of corruption and extortion committed by the local authorities, involving a sum of 120,072.50 USD. CNPC, on the other hand, gave a different account of the acquisition of land. The company insists that it never transferred land compensation through any intermediaries but paid the money directly to each farmer, and that the process of land acquisition was lawful and transparent.
- Livelihood: Fishing, a main source of food and income for the coastal Rakhine people, was affected as the military established a restricted area to protect the Shwe gas field. Local fishermen reportedly were told as early as 2009 that they could not fish near the planned pipeline route, and, according to the Shwe Gas Movement, in some cases they even had to bribe military officers to leave the port. In 2016, MCPWC reported that the companies involved failed to address the negative impact of the restrictions on the fishing households in Kyaukpyu.
- Culture: An ethnic Asho Chin community in Myay Latt, Magway, found its religious life disrupted after an Indian contractor originally in charge of construction of section A1 of the pipeline eradicated a sacred tree without prior notice. Since then the villagers have had to hold their religious rituals in other forests instead, and felt that their good luck and cultural roots had been undermined.
- Environment: MCPWC’s 2016 report accused the companies of irresponsibly dumping construction wastes, including containers of toxic chemicals. Construction-related waste, such as stones and cement bags, was found to be littering the farmlands along the pipeline route.
- Economic development: According to the project’s 2017 official brochure, the pipeline project pays a road-right fee of 13.81 million USD every year and a transit fee of 1 USD per ton of crude oil to the Myanmar central government. The pipelines supply gas to four offtake stations in Kyaukpyu, Thaung Thar, Yenanchaung, and Mandalay, serving both households and industrial electricity users, including the Myingyan and Kyaukse Industrial Zones in Mandalay. According to the brochure, the gas-fired power plants have enabled Kyaukpyu to become the first township in Rakhine with all-day electricity.
When the Chinese authorities and Myanmar’s military government began planning the pipelines in the mid- to late 2000s, limited public consultation was conducted, and people were not adequately informed about the project background and potential impacts. The lack of transparency and accountability from the central government, the military, and state enterprises in the planning of the project aggravated already-existing human rights issues and environmental pressures in the ethnic and rural areas along the envisaged pipeline route.
While activism against the project within the territory of Myanmar was limited because of the authoritarian regime then in place, activists tried to raise awareness about the pipelines through student societies and exiled groups in Thailand, Bangladesh, and India. Between 2006 and 2011, concerned groups backed by exiled activists and international lawyers, such as the Shwe Gas Movement, Arakan Oil Watch, All Arakan Students’ and Youths’ Congress, and EarthRights International, published a number of reports highlighting issues related to the lack of transparency and human rights abuses in the project.
More open activism became possible in the wake of Myanmar’s political transition after 2010, as connections between domestic civil society groups and the experienced activists in exile were strengthened. Some villagers along the pipelines began staging demonstrations in their villages, which would have been unimaginable under the previous regime. Inspired by the suspension of the Myitsone Dam in September 2011, in late 2012 21 community-based organisations established MCPWC as a coalition to document the social injustice and environmental destruction caused by the pipelines.
Between 2012 and 2013, the construction of the Myanmar section of the pipeline was interrupted several times due to local protests, armed conflicts in Shan State, and logistical challenges related to the nature of the terrains. In a rare move, in August 2013 the CNPC issued a seven-page response to inquiries from the London and New York-based CSO Business and Human Rights Resource Centre, inviting the organisation to facilitate dialogue between the company and Myanmar’s local and international groups. Such contacts with civil society organisations, however, did not last long after the roadblocks to the construction were cleared.
- Dai, Yonghong 戴永红 and Li Xing 力行. 2016. 世界油气管道的地缘政治经济研究：以中缅油气管道为例 [Geopolitics and Geoeconomics in World Oil and Gas Pipelines: A Case Study of the China–Myanmar Oil and Gas Pipeline]. Beijing: Shishi Chubanshe.
- Liu, Wei 刘伟, Hou Lijuan 侯立娟, and Wang Yashu 王亚舒. 2019. ‘缅甸天然气市场展望及中国企业投资合作建议 [The outlook for Myanmar’s gas market and the investment suggestion for Chinese enterprises].’ 国际石油经济 [International Petroleum Economics] 27, no. 8: 90–98. Link.
- Lu, Guangsheng 卢光盛. 2016. ‘缅甸政治经济转型对中国在缅投资的影响与对策研究 [Impacts of Myanmar’s Political and Economic Transition on Foreign Investment from China and the Countermeasures].’ Beijing: Shehui Kexue Chubanshe.
- Shu, Yuan 舒源. 2016. 中国进口油气安全研究 [China’s Security in Transport of its Oil and Gas Imports]. Beijing: Shehui Kexue Chubanshe.
- Simpson, Adam. 2016. Energy, Governance and Security in Thailand and Myanmar (Burma): A Critical Approach to Environmental Politics in the South. Abingdon-on-Thames: Routledge.
- Wong, Audrye. 2018. ‘More than Peripheral: How Provinces Influence China’s Foreign Policy.’ The China Quarterly, no. 235: 735–57. Link.
- Yang, Zhenfa 杨振发. 2014. ‘中缅油气管道运输的争端解决法律机制分析 [On the Dispute Settlement Mechanisms of the China–Myanmar Oil and Gas Pipelines].’ 红河学院学报 [Journal of Honghe University] 12, no. 2: 65–69. Link.
- Chen, Xiangqiu 陈湘球. 2017. ‘“一带一路”先锋者说(三) 中国企业在缅甸投资的商务模式初探 [The trailblazers of the “Belt and Road” (III): The Business Model of Chinese Enterprises Investing in Myanmar]’. 能源 [Energy], no. 6: 68–73. Link.
- China National Petroleum Corporation. 2013. ‘中国石油天然气集团公司回应有关中缅油气管道项目报告 [China National Petroleum Corporation responds to reports regarding China–Myanmar Oil and Gas Pipelines].’ London: Business and Human Rights Resource Centre. Link.
- China National Petroleum Corporation. 2017. ‘Myanmar-China Oil & Gas Pipeline Project (Myanmar Section): Special Report on Social Responsibility.; Beijing: China National Petroleum Corporation. Link.
- Southeast Asia Oil Pipeline Company and Southeast Asia Gas Pipeline Company. 2018. ‘中缅油气管道项目手册 [Myanmar-China Oil and Gas Pipeline Project Brochure].’ Mandalay: Southeast Asia Oil Pipeline Company and Southeast Asia Gas Pipeline Company.
- Zhang, Guobao 张国宝. 2018. ‘中缅油气管道十年磨一剑 [China–Myanmar Oil and Gas Pipelines: Sharpening a Sword in Ten Years].’ In 筚路蓝缕：世纪工程决策建设记述 [Trailblazing: A Narrative of the Engineering Decision and Construction of the Century]. Beijing: Renmin Chubanshe.
- All Arakan Students’ and Youths’ Congress. 2010. Overview of Land Confiscation in Arakan State. Mae Sot: All Arakan Students’ and Youths’ Congress. Link.
- EarthRights International. 2011. The Burma–China Pipelines: Human Rights Violations, Applicable Law, and Revenue Secrecy. Yangon: Earth Rights International. Link.
- Myanmar China Pipeline Watch Committee. 2016. In Search of Social Justice along the Myanmar–China Oil and Gas Pipeline. Mandalay: Myanmar China Pipeline Watch Committee. Link.
- Shwe Gas Movement. 2009. Corridor of Power: China’s Trans-Burma Oil and Gas Pipelines. Chiang Mai: Shwe Gas Movement. Link.
- Shwe Gas Movement. 2011. Sold Out: Launch of China Pipeline Project Unleashes Abuse across Burma. Chiang Mai: Shwe Gas Movement. Link.
- Shwe Gas Movement. 2013. Drawing the Line: The Case Against China’s Shwe Gas Project, for Better Extractive Industries in Burma. Chiang Mai: Shwe Gas Movement. Link.
- Ye Thein Oo, Thet Paing Kyaw, Mai Thuzar Khaing, Khin Mala Win, Tin Aung Zaw, Mai Aung Zaw Thike, and Zaw Aung. 2017. In Search of Social Justice along the Myanmar-China Oil and Gas Pipeline A Follow-up Report. Mandalay: Myanmar China Pipeline Watch Committee. Link.
Selected Media Sources:
- Aung Shin. 2015. ‘Negotiation impasse for China oil pipeline.’ The Myanmar Times, 25 September. Link.
- Campbell, Charlie. 2012. ‘Govt Accused of Ongoing Abuses at Shwe Pipeline.’ The Irrawaddy, 7 November. Link.
- Gronholt-Pedersen, Jacob. 2013. ‘China Showers Wary Towns In Myanmar With Gifts.’ The Wall Street Journal, 12 May. Link.
- Huang, Kaixi 黄凯茜. 2013. ‘中缅油气管道投产难 [China–Myanmar Oil and Gas Pipelines Face Difficulties to Become Operational]’. 财新周刊 [Caixin Weekly], 10 June. Link.
- Li, Yi 李毅, Wang Yu 王宇, and Yang Yue 杨悦. 2013. ‘专家称中缅油气管道苦果已现：对缅政局变动战略误判 [Experts Say China–Myanmar Oil and Gas Pipelines Have Suffered from a Strategic Misjudgment of the Political Changes in Myanmar].’ 财经 [Caijing], 17 June. Link.
- Macan-Markar, Marwaan. 2009. BURMA: China’s Oil, Gas Pipelines Recipe for Abuse, Warn Activists.’ Inter Press Service, 30 December. Link.
- Moe Myint. 2017. ‘Reporter’s Notebook: Has China’s Pipeline Project Benefited Maday Island Locals?’ The Irrawaddy, 18 July. Link.
- Yin, Hongwei. 2012. ‘Pipeline in the Crossfire.’ China Dialogue, 7 May. Link.
- Zhang, Mengyuan 张梦圆 and Yu Pei-Hua 余佩桦. 2019. ‘调查 | 被中缅油气管道改变的缅甸村庄生态 [Investigation: The Village Life Changed by the China–Myanmar Oil and Gas Pipelines].’ 世界说 [Globus], 23 April. Link.