The Myanmar-China Oil & Gas Pipelines

 

The Myanmar-China Pipeline Project consists of a crude oil pipeline and a natural gas pipeline. The oil pipeline is jointly invested and built by CNPC and Myanmar Oil and Gas Enterprise (MOGE). The gas pipeline is jointly invested and built by CNPC, MOGE, Daewoo International, KOGAS, IndianOil and GAIL.

The oil pipeline starts at Maday Island and the gas pipeline starts at Ramree Island, both in Kyaukphyu, Rakhine State, on the west coast of Myanmar. The two lines will run 771 km and 793 km respectively in parallel through Rakhine State, Magway Region, Mandalay Region and Shan State before entering into China at Ruili, Yunnan Province.

The pipelines' Myanmar section started to be built on June 3, 2010, and is expected to become operational in 2013.

CNPC's CSR efforts in Myanmar

 

CNPC is committed to "Caring for Energy, Caring for You", and adheres to the principle of Mutually Beneficial Development in its overseas operations. In Myanmar, we’ve launched a series of public welfares programs to promote local social and economic development. As of March 2012, CNPC had donated nearly USD 20 million to the Government of Myanmar and local communities for public welfares programs, in the fields of infrastructure construction, healthcare, education and disaster relief.

  Protecting the interests of local people
The pipeline project team handled land acquisition issues based on the principle of "voluntary decision" and "minimal impact on farmland", and paid compensation for the converted land in a fair, transparent and legal manner. We reroute the pipeline whenever the land conversion scheme is declined by local residents or wherever a stupa, temple, school, graveyard or wildlife reserve stand on the route.

The compensation amount is negotiated based on local land price, villagers' offer and government quotation, involving the residents, village chiefs, local government, Ministry of Energy and MOGE officials, as well as the pipeline companies' representatives. The mutually accepted results are subject to review and approval of the Government of Myanmar. The compensation funds are fully and timely paid to each household.
  Supporting infrastructure construction
In view of the power shortage problem in Rakhine State, CNPC, Southeast Asia Oil Pipeline Co., Ltd. (with CNPC's 50.9 percent stake) and Southeast Asia Gas Pipeline Co., Ltd. (with CNPC's 50.9 percent stake) decided in March 2012 to donate USD 10 million to support Rakhine State's new power line project. In particular, CNPC contributed USD 3 million and the two pipeline companies contributed USD 3.5 million respectively. Vice President of Myanmar Thihathura Tin Aung Myint Oo announced the plan of building this new power transmission grid on his inspection tour in that region. “The existing power grid in Rakhine State is very old,” he said. "I'd like to express deep gratitude on behalf of the Government of Myanmar to CNPC, Southeast Asia Crude Oil Pipeline Co., Ltd. and Southeast Asia Natural Gas Pipeline Co., Ltd. for their generous support to the new power grid project."

In order to solve the water supply problem at Maday Island, a water reservoir, as part of the crude oil terminal of the Myanmar-China Pipeline Project, is designed with a municipal water system to deliver potable water through water pipelines reaching the villages across Maday Island. The system is capable of providing 220,000 tons of fresh water per year to more than 2,000 local residents. Currently, the water supply system is in operation and all of the Maday villages have access to clean and safe fresh water.

In December 2010 and January 2011, two chemical fertilizer plants constructed by HQCEC, a CNPC subsidiary, were completed with an annual capacity of 150,000 tons of synthetic ammonia and 250,000 tons of urea to support the local agricultural sector.
 
Financing and refurbishing local hospitals and schools

In April 2011, CNPC signed a letter of intent with Myanmar's Ministry of Energy on helping build or reconstruct local hospitals and schools. Under this agreement, CNPC will provide USD 6 million to Myanmar by stage to build or upgrade local medical facilities and schools along the Myanmar-China pipelines, which will significantly improve local community's healthcare and educational conditions and benefit local residents.

 

 

In October 2011, CNPC's educational assistance program was launched. The initial phase of the program received USD 1.35 million to build 8 schools, including 2 secondary schools and 6 primary schools, in the four states/regions along the pipelines. In December 2011, CNPC signed an agreement with Myanmar's Ministry of Health to offer assistance to 19 medical sub-centers, i.e. 7 in Rakhine State, 1 in Magway Region, 6 in Mandalay Region (including a newly built hospital) and 5 in Shan State.

Southeast Asia Oil Pipeline Company and Southeast Asia Gas Pipeline Company spend USD 1 million each on a yearly basis to support local public assistance activities. As planned, there will be 45 primary and secondary schools and 24 hospitals and medical centers, covering approximately 20,000 students and 800,000 residents. By now, 30 schools and 18 medical centers are near completion and will be ready to serve local communities in the near future.

In January 2012, Southeast Asia Crude Oil Pipeline Co., Ltd. initiated USD 1 million community assistance package covering 25 public facilities, including 21 schools, 2 medical sub-centers and 2 kindergartens. After completion, these facilities will serve the healthcare needs of 1,320 residents and the educational needs of 105 pre-school kids and 1,891 students.

In March 2012, Southeast Asia Gas Pipeline Company kicked off 25 community assistance projects, including 2 medical centers, 1 hospital, 3 medical device procurement projects, 16 schools and 3 water wells.

  Focusing on environmental protection

Environmental protection is a top concern in the construction of the Myanmar-China Oil and Gas Pipelines. Environmental protection measures are developed in accordance with international standards. Environmental impact assessment is carried out in a scientific, rigorous, accurate and thorough manner. The environmental impact assessment (EIA) report gives an in-depth look into a number of environmental factors such as geology, climate, air, noise, water quality, hydrology, animals, plants etc., and identifies feasible solutions for mitigating or preventing the potential effects of the proposed projects on the environment.

Meanwhile, environmental protection clauses are included in all EPC contracts and subcontracts to make sure the contractors are aware of their environmental responsibility. The environmental protection information for the ecologically sensitive areas is made available to the contractors in a timely manner to provide a scientific basis for preparing the appropriate environmental protection plans.

Since its start, the construction process has been in strict compliance with the requirements and specifications set forth in the EIA report to protect the ecological environment effectively in the areas alongside the pipelines. So far, there has been no environmental pollution or ecological damage accident.
 
  Promoting employee training and creating jobs
Training local employees and creating jobs for local communities is the best practice of CNPC's commitment to the sustainable development of the host country.

The Myanmar-China Pipeline Project is creating more and more jobs for local communities. The workboat wharf project has engaged nearly 100,000 labor/days since December 2009. The water reservoir project has used 12,000 labor/days since January 2012. With the pipeline project in full swing this year, more jobs will be created for the local community.

We provide skill training for our Myanmar staff. We are recruiting and training Myanmar employees to meet post-completion operation, maintenance and logistics needs. The first 60 employees will receive language and professional knowledge trainings in groups in Myanmar and China and undertake internship at the oil and gas pipeline stations in China. In doing so, we hope to cultivate, for Myanmar, a team of technical and managerial talents who have expertise in pipeline operation.
  Helping disaster-affected areas
In May 2008, some parts of Myanmar were devastated by the Cyclone Nargis. CNPC donated USD 300,000 and USD 30,000 worth of relief supplies to the Government of Myanmar. In October 2010, Cyclone Giri caused catastrophic damage in parts of Myanmar. Without delay, CNPC donated USD 50,000 to Myanmar Disaster Relief Committee. In March 2011, soon after a magnitude 7.2 earthquake attacked northeast Myanmar, CNPC donated USD 50,000 to the area.
  Taking care of the underprivileged and participating in charity activities
In April 2012, CNPC Southeast Asia Pipeline Corporation visited a temple in Naypyidaw before the Myanmar Water Festival and donated 1.6 million kyat to the temple for purchase of food, stationery and toys as new-year gifts for the 290 orphans living there.
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