China the Beautiful

[chinapage]

'Build oil pipeline from Myanmar to China'

Chinese scholars propose way to reduce dependence on Strait of Malacca for shipping oil imports

By Tschang Chi-chu

BEIJING - Chinese scholars are proposing to build an oil pipeline from Myanmar to China in order to reduce the country's dependence on shipping oil imports through the Strait of Malacca.

The proposal put forward by three professors from south-west Yunnan province, which borders Myanmar, suggested that China build an oil pipeline from Myanmar's western deepwater port of Sittwe across the country to the south-western Chinese city of Kunming.

http://straitstimes.asia1.com.sg/asia/story/0,4386,261556,00.html

[yojimbo]

This is an ingenious way to slove the logistical issue.

[chinapage]

Chinese economy is highly dependent on imported oil - nearly all from Middle East and nearly all (90%) by oil tankers owned by foreign owners.

All of these oil tankers must go through Malacca Strait, which is infested by pirates.

There were proposals to build a canal, or a pipeline in Thailand, which were not accepted by most.

The new proposal is to build a pipeline in Myanmar (Burma). It will only cost around US$1 billion or so. It will shorten the shipping route. It will get the oil to Yunnan Province, which is wonderful.

Take a look at this map.



The oil tankers go from Middle East to a port in Burma, from there the oil goes a short distance to Yunnan via a pipeline.


The only problem with this proposal is international politics. U.S. is against it.
The chance of fast action is small.

Ming

[yojimbo]

There is another solution, which is the Kra canel.
Like the Panama canal.

http://www.2bangkok.com/2bangkok/MassTransit/kracanal.shtml

This will ease the Malacca strait traffic flow.
At the same time, the toll is more than enough to cover the cost of the projects, in times to come.

But politically, It will smash US's year long goal and investment to contain China.

Ships or vessels will no longer require to sail via the Malacca strait to North East Asia. It will pose no threat to China if US is to decide to vault ships from passing through Malacca Strait.

But this will surely kill Singapore ship industry.

[chinapage]

Kra Canal

Building a canal in Thailand - Kra Canal - has been proposed for many years. It will be a huge undertaking costing billions of dollars and taking many years to construct. Its disrupting effect on Singapore and others will be very significant. Even within Thailand, there are oppositions to the scheme.

At the present time, it remains merely a concept and a dream.

I have a map showing the location of the Kra region.

The new proposal is much more modest in scope. Instead of a new canal for sea traffic. It is merely a pipeline for oil. Indeed, it may benefit Singapore as well, by relieving the congestions of traffic in the Malacca Strait.
Even after such a pipeline is built, the bulk of oil import by China will still be goint through Malacca Strait to the Coast of China. So this will only a supplement and alternate route for China.

http://www.chinapage.com/map/map.html#kra

[yojimbo]

Dr.Pei,
this article may change your concept:

China's Demand For Oil May Make Thailand Canal A Reality

By Franz Schurmann
Pacific News Service (http://news.pacificnews.org)
Jul 22, 2003, 20:35

As maritime traffic snarls in a narrow waterway between Malaysia and Indonesia and nearby Islamic fundamentalism looms, giant China wants to build a canal through Thailand as an alternate way to ship oil. It's a development with huge implications for the economies of the region. PNS Editor Franz Schurmann (fschurmann@pacificnews.org) is emeritus professor of history and sociology at U.C. Berkeley and author of numerous books.

The mother of all maritime traffic jams is looming in Asia. Currently 50,000 ships, many of them giant oil tankers, traverse the Malacca Straits between Malaysia and Indonesia each year. Since the 17th century, visionaries have dreamed about finding a shorter route by building a canal through Thailand's narrow-necked Kra isthmus. Now Malacca traffic snarls, changing geopolitics and China's burgeoning thirst for oil might finally make that dream a reality.

Naval experts call the 621-mile Malacca Straits, as narrow as 1.5 miles in some parts, the world's foremost choke-point. With half of its 1.3 billion people now living in industrialized cities and towns, China's need for Middle Eastern oil could clog the straits by adding thousands of tankers to the traffic. Already, 80 percent of the oil that fuels economic superpower Japan comes through the Malacca Straits.

What has moved the Chinese into shooting for the Kra canal are their dashed hopes for getting Russian and Central Asian oil and natural gas through a multi-billion dollar pipeline. China and Russia are good friends, but both the Chinese government and some big American oil companies tripped up on Russian corruption and in-house rivalries. The Enron-like mess of the Russian energy industry threw a monkey wrench into Chinese economic expansion. Now are looking southward instead.

Articles have already appeared in China with headings entitled "Abandon the Malacca Straits and build the Thai Kra Canal." And a subtitle says, "This is shaking Southern Asia." Southern Asia, in Chinese eyes, includes all the countries from Southeast Asia through South Asia and Southwest Asia (aka the Middle East). Countries along the Malacca Straits like Singapore and Indonesia are understandably nervous that if the Kra canal becomes the shortest route from Europe and the Middle East to North Asia, their economies will be devastated.

These Chinese analysts as well as others point out that a shorter route will save time and money. But an unspoken reason for the bypass is that Indonesia's turbulent Aceh region has long shores along the Malacca Straits. And the turbulence has roots in Islamic fundamentalism. If the Aceh fundamentalists should gain power, then the whole Malacca Straits could be too risky as the sole lifeline to East Asia's economic powerhouses.

No wonder the Kra canal is a hot topic within ASEAN, or the Association of South East Asian Nations. ASEAN was formed in 1962 as a bulwark against Communist expansionism, especially by China and North Vietnam. Now Communist Vietnam is a full member. And Communist China along with Japan, South Korea and the United States are members of two auxiliary groups of "advisers."

ASEAN+1 (U.S.A) provides the military backup that is now focused on the War on Terror. ASEAN+3 (China, Japan and South Korea) provides the economic backup. On the War on Terror front, ASEAN has already pitched in with Japan, sending a thousand troops to Iraq. On the economic side, the Kra canal will be a monumental undertaking.

The powers that hold the keys as to whether this canal will see the light of day or not are the United States, Japan and China. And if they agree to go ahead, the actual builder will be China.

Chinese analysts have already calculated that the project could begin in 2005 and be completed 10 years later. It would employ a work force of 30,000. The rock-bottom cost will at least be US$20-$25 billion.

As the world's greatest builder of huge water works, China is well qualified to embark on a mammoth project like the Kra canal. The Three Gorges dam is now operational. China is also building the world's longest bridge, connecting Shanghai over a hundred miles of water with rapidly developing Ningbo. China has been carrying out construction projects in Eastern Africa, especially the Sudan, where they have been building oil infrastructure that American corporations will use when they finally swarm in.

The Kra canal, if it comes into being, will be a technological marvel like its sisters, the Suez and Panama canals. Ancient Romans had already envisaged the Suez Canal, which finally came into being in the 19th century. Europeans and Americans planned for the Panama Canal, which came about early in the 20th century. As early as the 17th century, Thai rulers brought in French experts to see whether it was possible to build a canal between the Gulf of Siam and the Andaman Sea, going through the Kra Isthmus.

What might finally make the canal real is the thirst for a dependable oil supply in one of the world's most booming economies.

[chinapage]

Dear yojimbo:

I am for the construction of the Thai Kra canal. Malaaca Strait is overly congested now with all those oil super tankers and container ships. How can it handle future growth without alternate routes?

Building the Thai Kra Canal will be the 21-th century engineering project just as Panama and Suez Canals were for previous centuries.

Realistically, however, it could not be completed in less than 20 years.

An oil pipeline through Burma can be easily constructed in 2-4 years. It will cost only a few billion dollars, and serve a limited purpose.

These two are not competing projects. We should do both.

The major obsticle of both project is geopolitical - mainly the U.S. interests.

Ming

[yojimbo]

Dr. Pei,
Here is a most recent news on the subject.
Apparently it articulated the same thing as we did here...

===========================================
Excerpt:
JULY 31, 2004
China pipeline plan to secure oil supplies
By Ching Cheong

HONG KONG - China wants to reduce its vulnerability over imported oil shipped via the Malacca Strait by building a pipeline to a port in Myanmar.

This will ensure that supplies will continue even when passage through the narrow and already very congested waterway is disrupted for whatever reasons.

According to sources, Chinese leaders discussed the project with Myanmar Prime Minister Khin Nyunt when he visited Beijing recently.

China estimates that by 2010 and 2020, its demand will reach 340 million and 440 million tonnes respectively, while domestic production will yield just 175 million and 190 million tonnes.

The shortfall of about 165 million and 250 million tonnes will have to be met by imports, largely from the Middle East. These work out to a high dependency ratio of 50 per cent and 60 per cent, respectively.

Given that four-fifths of its oil imports now pass through the Malacca Strait and the fact that China does not have a blue-water navy to protect the route, Beijing is distinctly uneasy about the risk of blockage should fighting with the United States break out over Taiwan.

This issue was first raised by Chinese President Hu Jintao at a Central Economic Meeting on Nov 29 last year. He asked officials to come up with possible solutions.

According to a source, the officials proposed four, with the first three centred on building a pipeline from the south-western province of Yunnan to Myanmar, from north-western Xinjiang province to Pakistan, or from Tibet to Bangladesh. The fourth solution entailed helping Thailand to build its Kra Canal.

The source said the Bangladesh option was ruled out almost immediately because it meant passing through Indian territory.

The Pakistani option is being considered in tandem with a railway line that China intends to build, linking up Kashi (Kashgar) in southern Xinjiang with the Pakistani port of Karachi in the Indian Ocean.

But this route has to pass through rugged terrain with harsh climatic conditions, thus posing formidable technical difficulties.

By comparison, the Myanmar option is more appealing, both politically and technically.

Historically, Myanmar has always been China's gateway to the Indian Ocean. During World War II, when the entire eastern part of China fell into Japanese hands, General Joseph Stilwell, commander of all American forces in the China-Burma-India theatre, built the famous Stilwell Highway to bring supplies from Indian Ocean ports to the Chinese resistance movement.

The Myanmar option was proposed by Yunnan University's Institute of South-east Asia.

According to Dr Li Cheng Yang, its director, the proposed pipeline will run from Kunming, Yunnan's capital, to the Indian Ocean port of Sittwe (Akyab), a straight-line distance of about 1,250km.

Compared with the current oil route via the Malacca Strait, this means a saving of about 2,000km. Cost of construction is about US$2 billion (S$3.4 billion).

According to Dr Li, this pipeline is the preferred option because it also tallies with another strategic railway that China wants to build, the Kunming-Yangon line, which opens up an Indian Ocean outlet for its otherwise landlocked south-west provinces.

Meanwhile, Thailand is also canvassing for Chinese support for its Kra Canal project, estimated to cost about US$28 billion.

As an interim solution, Thai representatives at the Fifth Conference on Petroleum Trade in April proposed building a pipeline connecting both ends of the isthmus.

Although this pipeline is estimated to cost only US$600 million, using it means double-handling of oil - once at each end - and is therefore not economical in the long run.

Sources added that Beijing was also rather hesitant about involving itself in any Kra Canal project as that would affect Singapore.

http://straitstimes.asia1.com.sg/asia/story/0,4386,264296,00.html?

[chinapage]

For a discourse on the pipeline and its strategic importance, see
this article.

http://www.chinapage.com/transportation/pipeline/pipeline.htm

[chinapage]

China mulls oil pipelines in Myanmar, Thailand
Sept 24,2004

Another report from Asia Times

http://www.atimes.com/atimes/China/FI23Ad09.html