The Korean company behind a major pipeline project in Burma says it has completed drilling and production tests and will move to the next phase of development, despite continuing calls from campaigners that the project be shelved.
The Shwe pipeline venture is estimate to be worth $US30 billion for the Burmese government, but environmental and human rights groups claim it will come at great human and ecological cost.
Burmese are also angry that the country’s vast natural gas resources, largely located off its western coast, are being sold to China, despite a shortage of energy in the country.
But the country’s democracy movement scored a point recently after Naypyidaw halted work on a massive China-backed dam in the north following months of protest, spurring campaigners to demand it shelves other environmentally destructive projects.
“The [pipeline] project could destroy the future for people’s social life, businesses and their livelihood, so the [government] needs to listen to the people’s voice,” said Wong Aung, from the Shwe Gas Movement (SGM). “This is a Chinese project run by China and when it’s completed, all the resources and future business opportunities will be sold to China. So everyone should stand against it.”
But the likelihood of the pipeline venture also being stopped is slim: Daewoo, the lead construction company in the project, announced this week that it had begun infrastructure work following successful early testing.
Along with Hyundai Heavy Industries, Daewoo will develop seabed platforms and onshore terminals in Burma’s impoverished Arakan state, as well as the 2,600 kilometre pipeline that will run from the town of Kyaukphyu across Burma to China’s southern Yunnan province. The company is expected to net more than $US320 million in profit each year once the gas starts flowing.
In a statement this week, SGM said Burmese will see little of the capital made from the pipeline, which will provide for around six percent of China’s total oil and gas needs.
“The revenues will disappear into a fiscal black hole that omits gas revenues from the national budget, clearly to the benefit of the regime and investors.”
The main Chinese company involved, the state-owned China National Petroleum Corporation, has made various efforts at placating criticism of the project and offering sweeteners to its opponents, including a recent pledge that it will finance the construction of schools and hospitals along the pipeline route.
Additional reporting by Francis Wade