Tankers begin to offload oil through China-Myanmar pipeline bypassing Singapore altogether

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Bloomberg reported last month (11 Apr) that the China-Myanmar 770km oil pipeline has just opened. A tanker with a capacity of 1 million barrels of crude oil, began offloading oil at Myanmar’s Kyaukpyu port on 10 Apr, before sending it through the pipeline.

China’s crude imports rose almost 14 percent last year, the fastest since 2010, and touched a record in December of 8.6 million barrels a day. Once the pipeline is in full-swing, it can supply almost 6 per cent of China’s crude imports.

The pipeline which has been under construction for years, is designed to carry 22 million tons of crude a year or about 442,000 barrels a day. It ends in China’s Yunnan province, where PetroChina has built an oil refinery with the capacity to process 13 million tons a year or about 261,000 barrels a day. PetroChina is also currently in talk with Saudi Arabian Oil Co to invest in the plant, which will officially be opened next month.

Once the refinery begins, it will likely increase China’s net exports of refined products, which rose to a monthly record of 2.85 million tons in November last year.

By-passing Singapore altogether

The Financial Times described the China-Myanmar pipeline as a key to China’s “two oceans” strategy to diversify energy supply away from the “chokepoint of the Strait of Malacca” as well as the vulnerable shipping lanes through the disputed South China Sea.

China has long been concerned of the Straits of Malacca. It is afraid that if it gets into a conflict with the US especially over the Taiwan issue, the Americans will blockade the straits in an attempt to shut off China’s oil supply.

Singapore’s preference of allowing US to base their Littoral Combat Ships in Changi and reconnaissance planes in Paya Lebar further hightens China’s concerns.

Hence, China is finding all ways and means to by-pass Singapore. This includes China’s investing heavily in ports and rail links in Malaysia. These mega projects in Malaysia, once completed, will alter trade routes in the region and would divert hundreds of billions worth of trade from Singapore.

Cargoes and goods within the region heading for China or vice versa are expected to bypass Singapore, when China-funded ports and East Coast Rail Line (ECRL) in Malaysia are completed within five to 10 years.

The ECRL project will connect ports on the east and west coasts of Peninsular Malaysia, and alter current regional trade routes, which ply between the busy Straits of Malacca and the South China Sea via Singapore.

China is fast becoming the largest country in the world in terms of GDP ranking. It is currently ranked second after US.

“We are free to play with others”

Meanwhile Singapore’s mainstream media, The Straits Times, which is controlled by the Government, blamed China for its undue demands on Singapore.

ST Editor, Chua Mui Hoong, said, “Singapore hasn’t changed in its foreign policy. It is China that has changed its view and demands on Singapore.”

“Singapore stands up for its national interests, not for the interests of any other society that wants to claim kinship with it,” she added.

“As Singaporeans, we play ball when it is in Singapore’s interests to do so. When it is not, we are free to play with others. The key is to make sure we have plenty of friends who still want to play ball with us, and that we all play by the accepted rules of the game.”

So, while Singapore continues to “play with others”, the soon-to-be largest economy in the world, China, will continue to bypass Singapore, helping to create jobs in other countries in the region instead.

Source: We want Minister Grace Fu to resign