“The crude oil pipeline is getting ready for operation. We are awaiting instructions from the management ,” said a source from the Southeast Asia Crude Oil Pipeline, which runs the pipeline.
The contract to transport crude oil was signed last month but the operation in troubled Rakhine State was yet to be finalised, said a Myanmar Oil and Gas Enterprise (MOGE) official.
The pipeline is controversial, provoking opposition among the public and non-governmental organisations.
In 2011, Thein Sein’s military-backed government suspended the Myitsone hydropower dam development in Kachin State over fears it would damage the environment and community.
A 771-km crude oil pipeline from the island of Maday in Rakhine State to China’s Yunnan province runs in parallel to the natural gas pipe which was fully operational since 2014.
The China National Petroleum Corporation (CNPC) and the then Burmese military government signed an agreement for the oil pipeline in 2008 and construction was completed in early 2015. It apparently has an annual capacity of 22 million tonnes.
Myanmar is due to earn US$13.8 million from both gas and oil pipelines per year and a fee of US$1 per tonne of crude oil under a 30-year deal.
Full operation of the pipeline was delayed by failure to reach an agreement on the commercial terms, the Myanmar Times reported.
The pipeline will provide a shortcut for crude oil from West Asia to reach southern China.
US$2.45 billion has reportedly been invested with the CNPC controlling 50.9 per cent of the project, with the rest of the shares in Burmese hands.
Myanmar’s first international oil terminal in Maday has oil storage, docks, a port and 12 crude oil tanks each with a capacity of 22 million gallons.
The project comes against a backdrop of ethnic turmoil in Rakhine State.
The leader of the Rohingya Muslim minority’s insurgency against the security forces reportedly told Reuters his group would keep fighting “even if a million die” unless State Counsellor Aung San Suu Kyi moved to protect the religious minority.
Attacks on Myanmar border guard posts on October 9 by a previously unknown insurgent group resulted in a brutal crackdown and more than 75,000 Rohingya fleeing to Bangladesh.
Ata Ullah, who is alleged to be the group’s leader, denied links to foreign insurgencies and said he was focused on the rights of the Rohingya.
“If we don’t get our rights, if 1 million, 1.5 million, all Rohingya need to die, we will die,” he said from an undisclosed location. “We will take our rights. We will fight with the cruel military government.”