Chiang Mai (Mizzima) – The Shwe Gas Campaign group and the Shan State Army-North (SSA-N) said that the gas and oil pipeline which will be constructed from Rakhine State to Yunnan Province in China could be disrupted by clashes between armed ethnic groups and the Burmese government.
Gas from the offshore Rakhine Shwe Gas Project and crude oil imported from the Middle East and Africa will be sent to Yunnan by two pipelines that will be built at an estimated cost of US$ 3.5 billion.
In a report released on Monday, the groups pointed out the danger to the pipelines that will cross Kyaukme, Hsipaw and Mansi townships where fighting among the SSA-N, the Kachin Independence Organization (KIO) and government troops has taken place.
“There are about 70 villages on the route of this pipeline where the SSA-N is operating. The fighting is in the Kutkai and Mansi areas too, where the KIO is operating. So the fighting takes place on both sides of the pipelines,” said Shwe Gas movement campaign spokesman Wong Aung.
The Shwe Gas project is a joint effort by the Chinese government-owned China National Petroleum Corporation (CNPC), South Korea Daewoo Company, the Indian ONGC Videsh Company and Gas Authority of India Ltd. (GAIL) and Myanmar Oil and Gas Enterprise (MOGE). Sub-contractors include the Burmese companies Thandar Nagar, Pyidawsi, Asia World and Myanmar Shwe Tharaphu, according to the report titled “Sold Out.”
Gas reserves in the Shwe Gas project A 1 and A 3 blocks are estimated at 4.5 to 7.7 trillion cubic feet. Burma will earn US$ 29 billion from the sale of gas to China over a 30-year, period starting in 2013, according to a Shwe Gas campaign statement.
A deep-sea port under construction at Madey Island will be used by Chinese tankers to carry crude oil from the Middle East and Africa. It is about 80 per cent completed. An underwater gas pipeline that will carry offshore gas to Kyaukphyu is about 40 per cent completed, Wong Aung said. A Memorandum of Understanding (MoU) for a special economic zone had been signed, but the details have not been made available, he said.
The Madey deep-sea port that will be completed by 2013 can be used by 300,000 DWT tankers and can handle 22 million tons of crude oil per annum, according to an official statement of Burmese government.
According to the Shwe Gas group’s report, in the project areas Burmese military and police personnel used local Rakhine people as forced labour, Chinese employees harassed local women, and farmlands were seized by companies in connivance with local authorities in return for meager compensation. The report included photographs and documentary evidence.
The two pipelines which will run about 800 km in Burma will connect Kyaukphyu in Rakhine State and Wanting in China by a route through Minbu, Mandalay, Gokehteik, Kyaukme, Hsipaw, Lashio, Kutkai, 105-mile junction in Muse, Kyukok and end at the Sino-Burma border town Wanting, 12 km southeast of Ruili in China.
From the border town, it will connect to a pipeline that will carry crude oil to a refinery at Kunming, the capital city of Yunnan Province.
Fighting has erupted between SSA-N and government troops since March 2011 in the areas crossed by the pipelines, which have been under construction since June 2010.
The SSA-N refused to accept government’s offer to transform its army into a government-controlled people’s militia. The SSA-N reached a ceasefire agreement with the government in 1989. At that time, SSA-N had three brigades: No. 1, 3 and 7. Brigades No. 3 and 7 have since been transformed into the people’s militia and only Brigade No. 1 opposes government troops.
Northeast Command commander Major General Myint Hlaing ordered SSA-N to relocate Brigade No. 3 headquarters from Namsan to Mongkhay in Hsipaw Township in 2006. Namsan is north of the Mandalay-Lashio highway where the pipelines will cross. Shan State Army (South) (SSA-S) and SSA-N troops are jointly operating in these areas now, SSA-N spokesman Major Sai Hla said. They are reportedly conducting joint military operations with KIA Brigade No. 4 in the Kutkai-Hseni area.
“Our troops moved to the Brigade No. 3 area to establish a base area at the end of February and now they have reached Muse and Nanhkan,” he said. “If they do not have peace with the with armed ethnic groups, I think, they have to be concerned with the security of these pipelines. No armed groups will accept upper-handed negotiations within the framework of 2008 Constitution.”
The Shan Herald Agency News reported that a 15-day geological survey had been conducted in the project areas of Mandalay, Madaya, Nawnghkio, Kyaukme and Nankhan.
The “Sold Out” report suggested suspending the Shwe Gas project until political stability is restored and Burma has a government that can protect the people.
Shwe Gas movement spokesman Wong Aung noted that losses have been incurred by CNPC in their investments in the politically volatile African countries of Niger and Libya. He said China could face a similar fate in Burma.
Six oil exploration projects in the two countries by the CNPC sub-contractor Great Wall Drilling Co. (GWDC) were suspended and China incurred a loss of US$ 186 million, said Chinese energy researcher Zhou Xiujie, according to a report by the Chinese news agency Xinhua on August 22.
A China-based military analyst Aung Kyaw Zaw noted that the pipelines have to cross a conflict zone where KIA Brigade No. 4 and a Border Guard Force (BGF) led by Mahtu Nau are operating. Mahtu Nau split from the KIO in 1990 and accepted the government’s offer to become a BGF in June 2009.
“Mahtu Nau is in the Kutkai area and the pipeline must cross the KIA 4th Brigade and 9th Battalion-controlled area. But they won’t fight each other. The Burmese government will ask the Chinese government not to support these armies,” he said.
Ruili-based sources said that 12-wheel heavy-duty trucks have been carrying pipe at the rate of 5 pipes per truck for about six months. A factory in the border town of Jiegao produces the pipes.
In addition, a Kyaukphyu-Muse rail project will be built along the route of the oil and gas pipelines at an estimated cost of US$ 20 billion. It is scheduled to start in December in the Muse-Lashio sector, The Mirror reported on September 5. Chinese experts conducted feasibility studies for the rail project in 2005, and the survey work of the route was completed in 2010.