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CNPC in Myanmar

CNPC has been present in Myanmar since 2001 and currently operates two onshore oil and gas development and production projects, one deep-water exploration and development project, while also providing oilfield services and construction of chemicals facilities and pipelines in Myanmar.
  • Oil and Gas Operations
  • Oilfield Services & Engineering
  • Local Development
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Bagan project

In November 2001, CNPC purchased the Bagan project in the center Myanmar from TG World and acquired a 100% interest of Block IOR-3, TSF-2 and RSF-3. Three blocks are implementing the production sharing contract (PSC) within 25 years, respectively.

Block IOR-4

In December 2001, we entered into a 20 year contract of improving oil recovery with Myanmar Oil and Gas Enterprise (MOGE) on Block IOR-4, which situated in southern Myanmar. In 2005, a high-yield gas flow was obtained from well PSC-1 during a production test in Block IOR-4.

Three deep-water blocks

On January 15, 2007, CNPC entered into a PSC with Myanmar Oil and Gas Enterprise (MOGE) and acquired oil and gas exploration and exploitation licenses for three deep-water blocks -AD-1, AD-6 and AD-8. The three blocks are located in offshore Rakhine, covering an area of 10,000 square kilometers.

CNPC provides oilfield services and engineering construction in Myanmar, including geophysical prospecting, well drilling, logging and testing.

On March 24, 2004, CNPC signed an EPS contract with the Myanmar Petrochemical Enterprise on constructing No. 4 fertilizer plant, including two 100kt/a synthetic ammonia units and two 150kt/a urea units. The project was launched in March 2007 and went on stream in January 2011, which became the Myanmar's most advanced and largest fertilizer plant. The project will further promote the development of agriculture in Myanmar. In 2011, 4A and 4B plants of Myanmar Petrochemical Enterprise's No. 4 Fertilizer Plant ran safely and smoothly, and reached their designed capacity of urea production.

The Myanmar-China Oil and Gas Pipelines

The construction of the Myanmar-China Oil and Gas Pipelines was originally proposed in 2004. In December, 2008, CNPC signed a 30-year purchase and sale agreement with South Korean conglomerate Daewoo International on importing natural gas from offshore blocks A-1 and A-3 in Myanmar. According to the agreement, pipelines will be constructed to deliver natural gas from Myanmar to China. Myanmar will also be able to tap the pipeline running across its territory to meet local needs for natural gas.

Important progress was made in 2009. We signed a series of agreements on constructing, operating and managing the Myanmar-China Oil and Gas Pipelines in 2009-2010, which clarified the JV's rights and obligations. According to the agreement, Southeast Asia Pipeline Ltd., our subsidiary, is JV's holding stockholder responsible for designing, constructing, operating and maintaining the oil and gas pipelines.

Construction of the Myanmar's section and Chinese section of the Myanmar-China Oil and Gas Pipelines began in June and September, 2010, respectively. Both pipelines start from Myanmar's Kyaukryu and enter China at Ruili in Yunnan Province. The oil pipeline is designed to transport 22 million tons of oil per year, and the gas pipeline is designed to transport 10-13 billion cubic meters of gas per year. An oil terminal was built on the west coast of Myanmar's Kyaukryu at the same time.

During pipeline construction we always adhere to high standards of HSE and quality management, achieving a first pass yield of 98.37% for welding and 100% for pipeline depth, and eliminating major HSE incidents with zero fatality per 1 million working hours.

Thanks to joint efforts of all participants from China, Myanmar, India and Thailand, the Myanmar-China Gas Pipeline has gone into full operation in October 2013. Meanwhile, under the Myanmar-China Natural Gas Pipeline Joint Venture Agreement, CNPC has built four gas distribution stations in Kyaukpyu, Yenangyaung, Mandalay and Taungtha to deliver 2 billion cubic meters of natural gas to the local communities on a yearly basis. In particular, the pipeline supplies natural gas to a power plant in Kyaukpyu, thus enabling a substantially longer time of power supply. 

In 2015, the Myanmar-China Gas Pipeline (Myanmar Section) saw safe and stable operation and the Fangchenggang Branch of the Chinese Section was completed and became operational, The Myanmar-China Crude Pipeline (Myanmar Section) started trial operation and Maday Island Port was opened for operation, whereas the Chinese section was welded, pressure-tested, and ready for operation. The Myanmar-China Oil & Gas Pipelines project has accumulatively supplied 424 million cubic meters of natural gas for Myanmar.

In 2016, Myanmar-China Gas Pipeline maintained safe and steady operation. The Myanmar-China Crude Pipeline was successfully connected with water transportation system.


Respecting indigenous rights and promoting community participation

During construction of the Myanmar-China Oil and Gas Pipelines, we protected the legitimate rights and interests of the indigenous people, respected their cultural traditions and customs, and minimized the impact of construction. We try not to occupy cultivated land, and reroute the pipeline to avoid temples, pagodas and other historical places and nature reserves. We adopted open, transparent and legal measures in land requisition, and respected the wishes of local residents by avoiding or bypassing areas lacking a land requisition agreement. We provided compensation to individual landowners before using their land. In particular, a land requisition group was formed between MOE, MOGE, SEAGP and SEAOP to be directly responsible for land requisition and compensation. Relevant land administrations are also directly involved in land measurement and compensation negotiations.

In addition, we actively promote project localization. During construction of the Myanmar-China Oil and Gas Pipelines, we do our best to employ local labor and increase local procurement. We have accumulatively hired over 2.9 million people, with more than 220 local companies involved. In order to improve the quality of life of people living along the pipelines, we also invested in the improvement of relevant infrastructure, including education, healthcare and electricity.

Disaster Relief

In May 2008, cyclone Nargis hit Myanmar, causing loss of life and widespread destruction. CNPC donated USD 300,000 in cash, and materials worth USD 50,000 to support disaster relief and post-disaster reconstruction.

Educational programs and medical facilities along the Myanmar-China Oil & Gas Pipelines

A community outreach program has been started in 2011 as part of the Myanmar-China Oil & Gas Pipelines Project. In April 2011, CNPC signed a letter of intent with Myanmar's Ministry of Energy on providing USD 6 million to Myanmar by stages to support the health and education initiatives in local communities. CNPC is also responsible for planning, equipment procurement, construction and staff training at these projects, while creating as many new jobs as possible for local communities in the process.

The first eight CNPC-funded schools along the pipelines, including six primary schools and two secondary schools, are under construction and expected to open before the start of the new school year in 2012. On December 18, we signed an agreement with Myanmar's Ministry of Health to help improve the medical conditions in local communities by offering assistance to 19 medical sub-centers i.e. seven in Rakhine State, one in Magway Region, six in Mandalay Region and five in Shan State.

Since its start, the pipeline project has been carried out in strict compliance with the local laws and regulations. The project hires 2,505 local employees, accounting for more than 50% of the total recruitment. All local employees are insured under the social security program. As to the compensation for converted land, we adhere to three principles — "voluntary decision", "minimal impact on farmland" and "compensation before construction". The compensation funds are paid directly to each household. There is no involuntary conversion or forced demolition, and no complaints have ever been reported from the compensated villagers.

In 2012, we aided the construction of a hospital, two schools and five clinics in Mandalay. In addition, we installed water pipelines for five villages in Maday Island, providing drinking water for more than 3,000 residents.

Also, training programs were designed and launched for local employees in order to ensure smooth operation, management and logistics of the pipelines once the project goes on stream. The training program is comprised of three phases, i.e. learning professional skills at the University of Yangon, Myanmar; taking Chinese language, English language and pipeline management courses at Southwest Petroleum University, China; and getting hands-on experience at CNPC's pipeline transport stations. So far, we have trained the first batch 60 employees from Myanmar.

As of the end of 2013, we had invested over USD 10 million in education, health, sanitation and disaster relief in Myanmar. We helped to build 45 schools for 19,000 students, and 24 hospitals and clinics, benefiting 800,000 local residents. We also helped to build high-voltage transmission lines in Kyaukpyu, Rakhine State in Myanmar, to secure the local power supply.

Since 2011, CNPC Southeast Asia Pipeline Company has hired 128 local college graduates and sent them to petroleum colleges in Yangon, Myanmar, and China to learn petroleum storage and transportation knowledge. Coupled with internship at pipeline stations, many of the young employees registered fast progress. Humphery, a Myanmar employee, stood out in the third skill competition on optical fiber fusion splicing held in Mandalay and won the title of “optical fiber fusion splicing dab”.

Environmental Protection

We developed and issued "Environmental Supervision Plan", "Specifications for the Administration of Environmental Supervision", and "Detailed Implementation Rules of Environmental Supervision" to minimize environmental impact during construction of Myanmar-China Oil and Gas Pipelines. A third party was engaged through international bid invitation to evaluate the environmental impact at the feasibility study stage. Full play is given to the supervisors, who oversee and inspect how the environment is protected along the pipelines during construction and, especially, monitor and control the environmentally sensitive areas on the construction site. Contractors are required to prepare special control plans for any work in an environmentally sensible area. Moreover, these plans have to be approved by the environmental supervision office of the project before they may be implemented. As such, the project has experienced no accidents, pollution, or casualties since its commencement.

Domestic Section of Myanmar-China Oil & Gas Pipelines Performs Excellently in Water and Soil Conservation

A total of 81% of the route traversed by the Myanmar-China Oil & Gas Pipelines in China is in mountainous areas with frequent seismic activity. The pipeline also passes through many scenic spots, nature reserves and water sources, as well as rivers such as the Nujiang and Lantsang where the requirements on environmental protection are very high. Through resource allocation and scientific design, we realized the objective of "zero injuries, zero pollution, zero accidents and zero geological disasters".

During the construction of the Myanmar-China Oil & Gas Pipelines, we applied more than 50 innovative technologies such as the parallel laying of oil and gas pipelines, saving 363 hectares of land and reducing the area of disturbed land by 1,735 hectares. We invested RMB1.227 billion as a special fund for water and soil conservation, and completed the construction of 298 m3 of masonry and concrete facilities for water conservation, treated 3,745 hectares of land, restored 1,866 hectares of farmland and 800 hectares of terraced fields, and cultivated 1,651 hectares of plants.

In August 2013, the water and soil conservation project for the pipelines passed national completion acceptance. The result of the acceptance reveals that the design and arrangement of water and soil conservation measures for the Myanmar-China Oil & Gas Pipelines (domestic section) is reasonable, with all water and soil conservation indexes meeting or exceeding national standards, and all water and soil conservation facilities operating and functioning properly.

Cultural Exchanges

We sponsored the dubbing of "Jin Tailang's Happy Life", a popular Chinese TV drama to be screened in Myanmar. In June 2013, dubbed into Myanmar, it was on Myanmar's national TV station MRTV, and was quite well received. This helped strengthen cultural exchanges between China and Myanmar.

Jan. 30 2015 The Myanmar section of the Myanmar-China Oil Pipeline jointly invested and built by CNPC and Myanmar Oil and Gas Enterprise (MOGE) was put into trial operation, and the Port of Maday Island was officially opened.

Nov. 14 2014 CNPC and the Myanmar Ministry of Energy signed an MOU on expanding oil and gas cooperation, in a bid to bring energy cooperation between the two sides to the next level.

Oct. 20, 2013 Trunk of the Myanmar-China Gas Pipeline became operational. The pipeline has a total length of 2,520 kilometers, including 793 kilometers in Myanmar and 1,727 kilometers in China, with a designed annual delivery capacity of 12 billion cubic meters.

Mar. 2012 CPP began to build the Myanmar-Thailand Gas Pipeline.

Jun. 3, 2010 CNPC signed the shareholder agreement of Southeast Asia Crude Pipeline Limited, rights and obligations agreement of Southeast Natural Gas Pipeline Limited, and shareholder agreement of Southeast Asia Natural Gas Pipeline Limited with Myanmar Oil and Gas Enterprise.

Jun. 16, 2009 A memorandum of understanding is signed on constructing, operating and managing the Myanmar-China Crude Pipeline by CNPC and Myanmar’s Ministry of Energy.

Dec. 24, 2008 CNPC signed a 30-year purchase and sale agreement with South Korean conglomerate Daewoo International on importing natural gas from offshore blocks A-1 and A-3 in Myanmar.

Jun. 20, 2008 CNPC, the Myanmar government and Daewoo Combo signed a MOU on sale and transportation of natural gas from Myanmer offshore blocks A-1 and A-3.

Jan. 15, 2007 CNPC signed a contract with Myanmar Oil and Gas Enterprise (MOGE) and acquired oil and gas exploration and exploitation licenses for three deep-water blocks- AD-1, AD-6 and AD-8.

Dec. 2001 CNPC entered into a contract with Myanmar's Ministry of Energy on Block IOR-4.

Nov. 2001 CNPC signed with TG World a purchase contract on Bagan Project.