Construction of an oil and gas pipeline linking Myanmar and China's Yunnan province is expected to start next year, said an official with the local government.

In line with the policy to boost domestic demand, Yunnan is to start building the pipeline in the first half of 2009, said Mi Gongsheng, director of the Yunnan Provincial Development and Reform Commission.

The project is one of a series of large energy and infrastructure projects Yunnan will embark on in2009, Mi told Xinhua News Agency. These projects are focused on six areas: large-scale industrial projects, railway construction, cleaning up Dianchi lake, power and coal projects, construction, power grid upgrades and rural road construction.

A file photo shows an attendant holds a petrol pump at a CNPC gas station in Beijing. [China Daily]

Yunnan province plans to invest 72 billion yuan in energy projects next year, said Mi.

The long-awaited China-Myanmar pipeline is expected to provide an alternative route for China's crude imports from the Middle East and Africa and ease the country's worries of its over-dependence on energy transportation through the Strait of Malacca. Japan's Nikkei newspaper reported that the investment inthe project was US$2.5 billion.

The project included a US$1.5 billion oil pipeline and US$1.04 billion gas line, said the newspaper. China National Petroleum Corp (CNPC) will hold a 50.9 percent stake and manage the project and Myanmar Oil & Gas Enterprise will own the remainder.

CNPC yesterday declined to comment on the project.

Analysts said that in addition to Yunnan, Chongqing municipality, Guangxi Zhuang autonomous region, Sichuan province and Guizhou province in southwest China will also benefit from the pipeline.

Driven by rapid economic development, China's oil imports have grown in recent years. In 2007 China imported nearly 200 million tons of oil, up more than 10 percent from 2006.

Analysts said China should further diversify its sources of oil imports to find more sustainable supplies. At present, the Middle East, Africa and Asia-Pacific are the three main regions from which China imports oil.

China plans to extend its oil and gas pipelines by nearly 60 percent by 2010. The country completed its first West-East gas pipeline in 2004. The pipeline, one of the biggest energy projects in the country, transmits natural gas from the Xinjiang Uygur autonomous region to the eastern coast.

Construction of the second West-East natural gas pipeline, costing 142.2 billion yuan, began in February.

(China Daily November 19, 2008)