China has signed a US$2.4 billion loan agreement with Myanmar to finance the construction of a natural gas pipeline between the countries, media reports said Sunday.
The loan was inked between the China Development Bank Cooperation and Myanmar Foreign Investment Bank on Nov. 30 in Napyitaw, the new capital, the Myanmar Times reported.
The pipeline is to run from Rakhine State on the Myanmar coast, site of the Kyauk Phyu national gas project, to Yunnan province in southern China.
“The loan will be mainly for the natural gas project in Kyauk Phyu, which involves Myanmar, China, Korea and India, where Myanmar has 7.3 percent of the shares,” said Jin Honggen, economic and commercial counselor of the Chinese embassy in Yangon.
He said the loan would help bring speed up construction of the project. Under the Myanmar-China gas scheme, India is to help build a new port in Sithwe, Rakhine, to handle gas from offshore reserves and China will construct a 1,000-kilometer pipeline to deliver the gas overland to Yunnan.
“The natural gas from Myanmar will be used for Yunnan province’s industrial requirements and for residential use,” Jin told the Myanmar Times.
Military-run Myanmar currently exports more than 1 billion cubic feet of gas (28 million cubic meters) a day of natural gas from its two offshore projects in the Gulf of Marthaban to neighboring Thailand via an underwater and overland pipeline network.
Thailand pays an estimated US$2 billion a year for the gas imports.