November 16, 2017

Trial pumping of imported crude oil to China via South East Asia pipeline

The United Dynamic arrives in Made Island, Rakhine State with 130,000 metric tons of crude oil that will be sent to China.

The crude oil tanker United Dynamic, carrying 130,000 metric tons of crude oil, arrived in Made Island, Kyaukpyu Township, Rakhine State from the Middle East on 10 April and discharged its cargo into crude oil storage tanks yesterday morning, completing the first step toward a trial pumping of crude oil through a pipeline across Myanmar into China.
As the crude oil makes its way through Rakhine State, Magway Region, Mandalay Region and Shan State, those states and regions will receive health, education, socio-economic developments and job opportunities, according to the agreement.
The Crude Oil Transportation Agreement between Myanmar and China was signed during the President’s recent trip to China. The 32-inch diameter pipeline will carry the crude oil 770 kilometers to Namkham Township, Shan State, at the country’s eastern border with China.
This project was implemented according to the agreement signed between the South East Asia Crude Oil Pipeline Company (SEAOP), in which Myanma Oil & Gas Enterprise of Ministry of Electric Power and Energy is a shareholder, and China National HK Corporation Limited.
US$2.25 billion was invested in the pipeline project, which can annually transport up to 22 million metric tons of crude oil. Myanma Oil & Gas Enterprise under the Ministry of Electric Power and Energy holds a 49.1 per cent share and China National Petroleum Corporation holds 50.9 per cent share in the pipeline project that was started in June 2010 and completed in 2015. The Made Island crude oil terminal was transferred to the Myanma Port Authority, Ministry of Transport and Communications on 28 February 2015. The project duration is 30 years. In addition to the pipeline, project assets includes the oil terminal on Made Island, a work boat wharf, five tugboats, 12 crude oil storage tanks each capable of holding 22 million gallons of crude oil, buildings, three pumping stations (Sinkhondaing, An Township, Mandalay and Hsipaw) and a crude oil metering station (Namkham).
The Southeast Asia crude oil pipeline passes through Rakhine State, Magway Region, Mandalay Region and Shan State. Myanmar will annually receive a Right of Way fee of US$6.905 million, a pipeline usage fee of US$1 per metric ton of crude oil , crude oil tariff of US$31.56 per metric ton and profit shares according to the shareholding.

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