» Business » Myanmar pipelines confirm China's place in Bay of Bengal

Myanmar pipelines confirm China's place in Bay of Bengal

June 29, 2009 10:01 IST

Come September, and China will begin to lay parallel oil and natural gas pipelines from the Kyaukpyu deep-sea port on Myanmar's Arakan coast in the Bay of Bengal, all the way up north-east to Kunming in China's Yunnan province. That will significantly enhance its energy security while also establishing the presence of Chinese ships in India's eastern backyard.

The 1,100-km-long gas pipeline will tap into key blocks in Myanmar's energy-rich Shwe gas fields (which are bigger than any gas field in India). The fields have been given on a 30-year lease to a Chinese-led consortium; the irony is that India's Oil & Natural Gas Commission has a 30 per cent stake in the field.

The pipeline project was inked during the visit to Beijing in mid-June by Myanmar's second-ranking general, Maung Aye. The pipeline reduces China's dependence on the narrow Malacca Straits, through which pass 80 per cent of its oil imports of 4 million barrels per day.

The circumvention of its "Malacca dilemma," a reference to Chinese President Hu Jintao's statement in November 2003 that "certain major powers" could choke the narrow channel between Malaysia and Indonesia's Sumatra island in case of a conflict, is a coup on Bejing's part even as it seeks to secure more energy resources worldwide to feed its growing economy.

When the oil and gas pipelines are completed by 2013, according to China National Petroleum Corporation, Chinese tankers will dock at Kyaukpyu port to transport 0.6 million barrels every day from West Asia and Africa. The gas pipeline, meanwhile, will move about 12 billion cubic metres of gas annually to Kunming.

Myanmar has become the centre of Sino-Indian rivalry for energy resources, with Yangon agreeing in 2004-05 that India build a pipeline from its newly discovered A-1 block in the Shwe gas fields, through Bangladesh, to serve India's north-eastern states. When Dhaka refused India transit permission, PetroChina was waiting to make a counter-offer, and willing to fund the cost of the pipeline.

Indian officials who spoke on condition of anonymity said Delhi was not "overly concerned" by the fact that the Chinese had been able to "score over India", simply because Myanmar's generals in the State Peace & Development Council had also allowed Indian companies to expand their footprint on Myanmarese territory.

K Vhome, an expert on Myanmar at the Observer Research Foundation, conceded that while China's enhanced presence in the Bay of Bengal would "create some uneasiness in India," the "changing discourse in India-Myanmar relations in the last decade means that the India factor has become important in Myanmar's relationship with China." He said Myanmar has embarked upon a "very cautious balancing act, calculated to reduce its overwhelming dependence on China".

Describing it as Myanmar's effort to attain "strategic equidistance" between India and China, Indian officials pointed out that Yangon's generals had allowed Delhi in 2008 to "build, operate and use" the Sittwe port on the Arakan coast in the Bay of Bengal and make the Kaladan river navigable all the way up to the adjoining state of Mizoram.

Delhi's success with the Kaladan project means it has been able to circumvent Bangladesh's refusal of access to India's north-east and establish a presence on the Bay of Bengal.

The officials also pointed out that Yangon, having withdrawn the offer to develop a hydro-electric project on the Tamanthi river because of inordinate delays in New Delhi, had a few weeks ago offered it back to the National Hydroelectric Power Corporation, on the condition that the detailed project report be submitted to Yangon in 12 months.

Meawhile, as China has built a network of roads and railways across the country, plus a base on Myanmar's southern tip and listening posts on some Myanmarese islands, India too has begun to forge cross-border links.

The India-Myanmar Friendship Road was completed in 2001 from Tamu to Kalewa, via Kalemyo, while two other sections at Rhi-Tidim (where Mizos believe their souls come to rest) and Rhi-Falam across the border from Mizoram are under way.

An optical fibre network has been laid from Mandalay to Yangon and onward to Kolkata, Essar is in the oil business and Tata Motors is planning to sell buses to Myanmar.

Myanmar's efforts to diversify its relationships also means that Thailand, not China, has become Myanmar's largest trading partner – and athis includes the export of natural gas.

As for Russia, it has sold fighter aircraft to Myanmar and given assistance to build a nuclear research reactor.

Vhome summed it up when he said, "Myanmar's relationship with China is a very old one, but at least India is being seen as a counter-weight to China in the region".

Jyoti Malhotra in New Delhi
Source: source