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China receives first oil delivery via Mekong River

By in News on

On December 29 two ships carrying a total of 300 tons of refined oil from Thailand arrived in Jinghong in southern Yunnan, marking the initiation of a scheme to transport oil from Southeast Asia, according to a China.org report.

The oil transport route is a result of an agreement signed in March 2006 by China, Laos, Myanmar and Thailand to cooperate on the shipping of oil along the Mekong, which connects Yunnan with the three Southeast Asian countries as well as Vietnam and Cambodia. In China the river is known as the Lancang Jiang or Lancang River.

The initial accord to ship oil to China via the Mekong allowed for a monthly shipping quota of 1,200 tons of refined oil, but the quota has since been raised after China established an emergency response team to monitor oil transport on the river and respond to any accidents.

The route is a rather risky one for the countries on the Mekong as any spills or accidents would flow southward, affecting the environment and economies of the five countries downriver from Yunnan. China is expecting to receive 200,000 tons of refined oil via the new route, which makes it possible to circumvent shipping oil through the pirate-infested Malacca Strait.

The shipping route is an estimated 200 yuan/ton cheaper to ship to Yunnan than existing land routes and will also make it cheaper to transport oil to Sichuan and Guizhou provinces. Engineers are already exploring ways to increase the river's oil transport capacity.

The Mekong was opened to commercial navigation in the early 1990s and has developed into a major tourism, ore and commodities transport route, with more than US$1.3 billion in goods traveling the river in the past five years.

Southwest China's increasing thirst for oil is a driving force behind projects such as this new river route that are aimed at increasing the Chinese hinterland's access to energy sources.

One of the largest of these projects is a planned US$2 billion pipeline from Myanmar that will connect Kunming to the Andaman Sea port of Sittwe. Scheduled for completion in 2009, the pipeline will be able to transport oil and gas from the Andaman Sea as well as oil and gas shipped to the port from the Middle East and Africa. As with the Mekong project, one of the major advantages of the Sittwe-Kunming pipeline is cutting the Malacca Strait out of the picture.

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