Currently, 80 per cent of China's annual imports of 1.5 billion barrels of oil have to pass through the Strait of Malacca, a narrow 500-mile stretch of water between Malaysia and the Indonesian island of Sumatra.
The strait is one of the world's busiest shipping channels, connecting the Indian and Pacific Oceans. Over 50,000 vessels pass through it every year, carrying a quarter of the world's traded goods.
However, the strait poses a twin strategic risk to China. Not only is it infested with pirates, but it also leaves China vulnerable in case of a conflict with Taiwan, since the island could easily blockade Chinese ships and cut off China's main supply route.
When Chinese oil tankers begin docking at Sittwe, it will shave one week off their journey time from Africa, and 1,118 miles off their voyage.
Construction on two pipelines, one for gas and one for oil, will begin next year, according to Mi Dongsheng, the director of the Yunnan Provincial Development and Reform Commission.
Chinese state media said China National Petroleum Company, the country's largest oil and gas firm, would take a 50.9 per cent stake in the near £2 billion project, with the rest owned by the Burmese state oil company. China is planning on extending its oil and gas networks by 60 per cent over the next two years, said the China Daily newspaper.
Neither Mr Mi nor CNPC would comment further on the details of the project.
Earlier this year, China inked contracts to explore three offshore areas of Burma for gas for reserves that could be worth between £18 billion to £26 billion.
Other foreign investors in the Burmese energy sector include France's Total, US oil producer Chevron and Thailand's PTT Exploration and Production
Author: Jo Amey
