30 Dec 2008

Foreign companies to pipe Burma oil to China

6:46 am on 30 December 2008

State media in Burma report the military government has signed a deal with a consortium of four foreign companies to pipe natural gas into neighbouring China.

The gas is from fields off Burma's north-western coast.

The New Light of Myanmar state newspaper reported the deal was signed in a ceremony in Rangoon on 24 December.

China's state news agency Xinhua says it is a 30-year deal.

The companies are Daewoo and Korea Gas Corporation of South Korea, and ONGC Videsh and GAIL of India. Daewoo holds the leading 51% stake in the deal.

The United States and Europe maintain economic sanctions against Burma - also known as Myanmar - for its human rights record and long detention of democracy leader Aung San Suu Kyi.

But the BBC reports their impact has been diluted by energy investments from nearby countries, including China, India and Thailand.

Gas from underwater reserves off the state of Rakhine will be piped to China to supply the National United Oil Corporation.

Earlier reports from Beijing suggested construction will start in the new year.