China will start building oil and gas pipelines through Myanmar next year, enabling it to slash the journey time for crude oil imports from the Middle East, state media said Wednesday, citing an official.

The pipelines into China’s southwestern Yunnan province would cut out oil cargoes’ long detour through the congested Malacca Strait as well as strengthen China’s access to rich energy reserves in Myanmar itself.

Yunnan will start construction in the first half of 2009 as part of its plan to spend 72 billion yuan ($10.55 billion) on energy projects next year, Mi Dongsheng, head of the province’s Provincial Development and Reform Commission, was quoted as saying in the China Daily.

Mi, CNPC executives and Burmese officials were not available for comment on Wednesday.

The project will include a $1 billion gas pipeline and a $1.5 billion oil pipeline, Japan’s Nikkei newspaper reported.

China National Petroleum Corporation, the parent of PetroChina will manage and own a majority share in the joint project with Myanmar Oil & Gas Enterprise, the paper said.

In May CNPC said it would jointly explore for oil and gas in Myanmar with South Korea’s Daewoo International Corp, giving no details.

Few Western companies will invest in the former Burma because of its poor human rights record and continued detention of Nobel Peace Prize laureate Aung San Suu Kyi, which has led to a broad range of U.S. and European sanctions.

Foreign investors in the energy sector include France’s Total , U.S. oil producer Chevron and Thailand’s PTT Exploration and Production.

China, typically wary of supporting or imposing sanctions and one of Myanmar’s few diplomatic allies, has shown no qualms about investing in its southwestern neighbour, coveting its natural gas, oil, minerals and timber.

Yunnan’s announcement comes amid a nationwide push to build infrastructure in order to revive China’s flagging economic growth and to expand access to energy resources.

China finished a domestic gas pipeline stretching from its rural west to the energy-hungry east in 2004. It plans to expand gas and oil pipelines by almost 60 percent by 2010, the China Daily report said.

Source: http://www.afxnews.com

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