Sinopec Makes Gas Discovery in Myanmar - Official

BEIJING (Dow Jones Newswires), Nov. 18, 2010

China Petrochemical Corp., or Sinopec Group, has found gas during exploration work in central Myanmar, but the extent of reserves there isn't clear yet, a Myanmar energy official said Thursday.


Sinopec has been exploring for oil and gas near Monyma, which is some 140 kilometers northwest of the city of Mandalay, said Win Myint, engineering director of the country's state-owned national energy group, Myanmar Oil and Gas Enterprise.

The news is another sign of China's growing role in developing resource-rich Myanmar's extensive reserves of raw materials, at a time many Western countries are obliged to sit on the sidelines due to their restrictions on economic ties to the country.

A spokesman for Sinopec Group said he had no information about the gas discovery.

Also, China Oilfield Services, a subsidiary of China National Offshore Oil Corp., or Cnooc Group, is carrying out offshore gas exploration in a shallow water block in southwest, close to Sittwe, the official said.

"There's lots of exploration being made by Chinese companies in Myanmar. All are in the exploration stage," he told Dow Jones Newswires on the sidelines of an energy conference in Beijing.

The official said China was pushing ahead with its twin gas and oil pipeline projects in Myanmar and the pipelines were due to be completed by May 2013, on schedule.

In June, China National Petroleum Corp. said it had started work on the pipelines, which are intended to transport gas from Myanmar's large offshore oil fields, and imported crude oil, to southwestern China.

The 793-kilometer gas pipeline and 771-km crude oil pipeline will be important elements in China's diversification of energy supply, CNPC said on its website.

CNPC started building a large-scale crude oil port in Kyaukpyu in western Myanmar late year to handle imports from the Middle East and elsewhere.

The crude pipeline from there to China will have an initial transmission capacity of around 240,000 barrels a day, which in the second phase will be expanded to 440,000 barrels a day.

China's economic planner, the National Development and Reform Commission, has said the port will be capable of handling vessels of up to 300,000 deadweight tons and that an oil tank with a storage capacity of 600,000 cubic meters will also be built there.

The Myanmar energy official said Wednesday work was now under way on five separate crossing points where the pipelines needed to bridge rivers or go through tunnels.

The Myanmar section of the natural gas pipeline will cost $2.15 billion, while the crude oil pipeline and the port will cost $2.45 billion, he said.

Work in Myanmar on the second phase crude pipeline would begin in 2012, with this expected to be completed by 2015, he said.

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