Chinese state-run oil refining giant PetroChina aims to start operating its delayed Anning refinery in southwest China’s Yunnan province in October, according to a Reuters report.

 

The 260,000 barrels per day (bpd) plant is designed to process high sulphur crude oil shipped by tankers from the Middle East to Myanmar’s Maday Island in Rakhine State, then sent via the South East Asia Crude Oil Pipeline (SEAOP) across Myanmar to the Yunnan refinery.

 

The pipeline provides the option for China’s crude oil imports to bypass Singapore, the Straits of Malacca and the contentious South China Sea, with a capacity of 440,000 bpd.

 

SEAOP was largely finished by the start of 2015, though it is unclear how much crude it has actually transported and is thought to still be in a testing phase.

 

One of the major hold-ups has been a lack of refining capacity on the Yunnan end of the pipeline. The Anning refinery has been delayed several times, partly due to tightening environmental regulations forcing several changes to plant configurations.

 

The Reuters report also said that the refinery has also been delayed as the new Myanmar government has been reviewing the deal on the pipeline. No specific details were added in the report.

 

Pipeline construction been a controversial topic in Myanmar, with some local people claiming they have been under-compensated for giving up their land or that they caused environmental damage.Saudi state firm 

 

Aramco is planning to invest $1 to $1.5bn in the refinery as well as retail assets of PetroChina. If the deal is finalised, Saudi Arabia would supply at least part of the refinery’s crude oil requirements, the article said.

 

SEAOP largely twins the early Southeast Asia Gas Pipeline (SEAGP), which runs 793km from the Shwe Gas offshore field in Myanmar to Yunnan. It was completed in October 2013, though previous figures have shown it to be underutilised.