Beijing, July 29: China has switched on a pipeline bringing natural gas from Myanmar, a state company said on Monday, in a project that has raised concerns in Myanmar's nascent civil society about whether its giant neighbour's resource grabs will benefit local people.
The 793-kilometre pipeline connects Bay of Bengal with southwest China's Yunnan province and is expected to transfer 12 billion cubic meters of natural gas to China annually, according to a news release on the website of China National Petroleum Corporation (CNPC). A parallel 771—kilometre pipeline that will carry Middle East oil shipped via the Indian Ocean is under construction.
China's investments, largely in energy and mining, have generated controversy in Myanmar because they have done little to relieve that country's chronic power shortages. In response, last year the Myanmar government abruptly suspended construction of the China-backed Myitsone dam, which would displace thousands and flood the spiritual heartland of Myanmar's Kachin ethnic minority.
While the pipelines are expected to provide only a small proportion of China's oil and gas consumption, they are strategically important to Beijing. The gas pipeline that began operating on Sunday offers a nearby source of gas, and the oil pipeline would eliminate the need for tankers from the Middle East to pass through the crowded Malacca Strait between Malaysia and Indonesia.
The two joint ventures are between state-owned China National Petroleum Corporation (CNPC) and Myanmar's national petroleum company Myanmar Oil and Gas Enterprise. Four other companies from India and South Korea also have stakes in the project, according to CNPC.
For years, China was the closest ally of Myanmar's military regime, which was shunned by the West because of its poor human rights record and failure to hand power to an elected government. Since 2011, when an elected though still military-backed government took office, Myanmar has undergone political and economic reforms and has courted investment from the West.
The reforms have brought heightened activity from non-government and civil society groups in Myanmar, said Tony Nash, Singapore-based managing director of economics and risk consulting for IHS, an independent economic consultant. This, together with growing competition from Western companies in Myanmar, will push Chinese companies to be more transparent about how their investments will affect the local population, he said.
In April this year, hundreds of people protested in western Rakhine state against the pipeline, saying they had to give up their land for too little compensation and that salaries offered for local pipeline workers were too low.
Wong Aung, who heads the Shwe Gas Movement, which campaigns against the pipelines on human rights and environmental grounds, said the government and companies have not clarified how the project's benefits would be shared.
“The contracts made by the previous government need to be reviewed to see whether they guarantee the national interest and rights of every citizen and whether they meet international standards or not,” he said.
Even on the Chinese side of the border, opposition to the pipeline has been strong. In May, more than 2,000 people worried about air and water pollution protested in Kunming in Yunnan against a planned petroleum refinery connected to the project.
