Nov 12, 2012

Rakhine and central Myanmar to get 100 million cu/ft natural gas a day

Rakhine and the central Myanmar will get 100 million cubic feet of natural gas a day upon completion of the Myanmar-China oil and gas pipeline, Minister for Energy Than Htay said on November 9 in the Lower House.

The ministry aims to purchase 2 million barrels of crude oil from the Myanmar-China project every year for local consumption, the minister added.

“The aim of constructing the Myanmar-China oil and gas pipeline is for mutual friendship, to create job opportunities and ensure energy security. Once completed, about 100 million cubic feet of natural gas can be supplied every day. For local consumption, 2 million barrels of crude oil can be bought every day. This is one of the most beneficial projects because it can fulfill the energy requirement of the country,” the minister continued.

Despite the fact that China carries crude oil from Africa and Middle East by tankers, guarded by military ships, Chinese military ships are not allowed to pass Myanmar water territory because this point is not included in the deal, the minister said.

The project between state-owned Myanmar Oil and Gas Enterprise and China’s CNPC South-East Asia Pipeline Co will involve Myanmar being paid US$13.8 million annually for the right of way. The pipeline transit will use 26.1 square kilometres (6449.3 acres) of land. The pipeline will be 30 metres wide and 870 kilometres long, and the agreement will last for 30 years. The transit fee for the pipeline is based on the international transit rate and on one acre rental price rate of the United States, the minister disclosed.

For the calculation of transit fee for the pipeline, one acre costs US$2141.24 and the cost of one acre rental in the US in 2009 was US$2310.26.

Myanmar will get one US dollar transit fee for one tonne. As the project will generate 22 million tonnes of crude oil a year, Myanmar will gain US$22 million a year, for 30 years.

Source: 11 Media Group