China and Myanmar have signed an agreement on crude oil pipeline transportation.
Chinese vice foreign minister Liu Zhenmin said that the delivery will begin ‘very quickly’, reported Reuters.
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The agreement was signed during Myanmar President U Htin Kyaw’s official visit to China.
The 771km crude oil pipeline was constructed connecting Made Island in western Myanmar with China’s north-west province Yunan.
State-owned China National Petroleum Corporation (CNPC) and the Myanmar Government entered an agreement for the crude oil pipeline project in 2008, which was completed in early 2015, reported Myanmar Times.
The pipeline runs parallel to a natural gas pipeline that became operational in 2014.
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By GlobalDataMyanmar will annually receive a road right fee of $13.81m from gas and oil pipeline projects in addition to a transit fee of $1 per tonne of crude oil under a three-decade concession agreement.
In January 2015, a trial operation of the crude oil pipeline began, however, operations on full scale were delayed as the two countries could not come to an agreement regarding the commercial aspects of the pipeline project, according to officials.
The entire crude oil pipeline project had seen an investment of $2.45bn and CNPC has 50.9% stake in the project, while Myanmar holds the remaining stake.
This pipeline is intended to annually transport 22 million tonnes of crude oil.
Myanmar’s first international oil unloading terminal constructed in Made Island is a huge project site, with facilities for oil storage, and includes a dockyard and seaport with a 38km vessel route and 480m-long oil loading terminal.
