CNPC starts construction of refinery, pipeline system

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Sept. 13 -- China National Petroleum Corp. has begun construction of two pipelines and a refinery in China’s Yunnan province aimed at transporting and processing oil and natural gas to be imported from Myanmar starting in 2013.

The oil and gas pipeline development is in line with China's aim of diversifying the methods and sources of its imports, according to Yunnan Gov. Qin Guangrong. “It will lessen risks and strengthen China's ability to cope with the complex and volatile international situation," he said.

CNPC launched construction of the two pipelines in Anning city near Kunming, the capital of Yunnan province in southwestern China. The planned 440,000-b/d oil pipeline and the 12 billion cu m gas pipeline both start at Kyaukryu port on the west coast of Myanmar, where construction began in June.

Oil for the line will come from China’s Middle Eastern and African suppliers, while the gas line will be fed by fields in Myanmar, which has the most extensive gas reserves in Southeast Asia at 21.2 tcf.

Analysts said the oil line will enable China to bypass the sea route through the piracy-prone Strait of Malacca, while the gas line will help meet rapidly expanding demand in southern China (OGJ Online, June 4, 2010).

Each pipeline extends 800 km inside Myanmar before entering China at the border city of Ruili, in Yunnan province. The two lines each will then extend a further 1,700 km inside the province before reaching their destinations.

Refinery construction
Along with the pipelines, CNPC also began building the 200,000-b/d refinery in Anning City. The $3.4 billion project is to include a 10 million million tonne/year crude distillation unit and 14 other main processing facilities. Feedstock crude for the refinery will come via the new pipeline from Myanmar.

The pipeline and refinery projects are expected to come online together by yearend 2013, and could produce 7.8 million tpy of oil products for Yunnan province and its neighbors Guizhou province and the Guangxi Zhuang Autonomous Region.

Construction of the pipelines and refinery follow reports that CNPC subsidiary PetroChina plans to build three product pipelines in Yunnan Province—all of them leading from the Anning refinery.

The three pipelines—Anning-Kunming-Qujing, Anning-Chuxiong-Dali-Baoshan, and Anning-Yuxi-Mengzi-Wenshan—will each transport products throughout Yunnan province as well as to the neighboring regions.

Analyst IHS Global Insight said the three lines will support “efficient allocation of oil products from Anning to northeastern, northwestern, and southern areas of Yunnan province.”

The analyst said that such efficiency “will allow PetroChina to build on its current 20% market share in the province, which is traditionally dominated by Sinopec via the Southwest China Oil Product Pipeline.”

IHS Global Insight also said that these efforts build on PetroChina's launch of the Qinzhou refinery, which will improve the company's competitive edge in southern provinces by “reducing transportation times and the high costs of supplying oil from large fields in northern China to Yunnan.”

The lines from Myanmar, the Anning refinery, and the three product pipelines are all part of China’s effort to boost its domestic refining capacity and reduces its dependence on expensive imports.

In a new refinery building boom, industry officials and Chinese media report that Beijing plans to add more than 3 million b/d of new refining capacity between 2010 and 2015.

Contact Eric Watkins at

Related Articles

Puma Energy completes purchase of Murco’s UK refinery, terminals

07/02/2015 Singapore-based Puma Energy Group Pte. has completed its purchase of UK midstream and downstream assets from Murco Petroleum Ltd., a subsidiary of ...

SIBUR plans MTBE expansion at Togliattikauchuk

07/01/2015 Russian conglomerate OAO SIBUR Holding, Moscow, has started preparatory work for a project designed to expand production capacity for methyl tertia...

OxyChem-Mexichem JV lets contract for ethylene storage

06/30/2015 Ingleside Ethylene LLC, a 50-50 joint venture of Occidental Chemical Corp. (OxyChem) and Mexichem SAB de CV (Mexichem), has let a contract to CB&am...

RIL’s Jamnagar refinery due maintenance

06/29/2015 Reliance Industries Ltd. (RIL), Mumbai, is planning to shut down a crude unit for scheduled maintenance at its 1.24 million-b/d Jamnagar refining a...

OGJ Newsletter


BP: US surpassing Saudis in oil output among world's 'tectonic' energy shifts in 2014

06/29/2015 An eventful 2014 in the world oil and gas markets was headlined by the US overtaking Saudi Arabia as the world's biggest oil producer and surpassin...

Gazprom Neft lets contract for Moscow refinery

06/29/2015 Russia's JSC Gazprom Neft has let a contract to Tecnimont SPA, a subsidiary of Maire Tecnimont SPA, Milan, for engineering, procurement, and constr...

Marathon commissions unit at Kentucky refinery

06/29/2015 Marathon Petroleum Corp. (MPC) has commissioned a 35,000-b/d condensate splitting unit at its 242,000-b/d Catlettsburg, Ky., refinery to boost the ...

Petronas lets contract for RAPID complex

06/26/2015 Malaysia’s state-run Petronas, through a contractor, has let a contract to Industrial Cooling Solutions Inc. (ICS), Lakewood, Colo., to build a 28-...
White Papers

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by
Available Webcasts

On Demand

OGJ's Midyear Forecast 2015

Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.


Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!


Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected