China starts oil shipping via the Mekong River

Xinhua News Agency 29 December 2006

Two ships each carrying 150 tons of refined oil have arrived in southwest China's Yunnan Province from neighboring Thailand via the Mekong River, marking the trial launch of China's oil shipping program with its Southeast Asian partners.

Two ships each carrying 150 tons of refined oil have arrived in southwest China's Yunnan Province from neighboring Thailand via the Mekong River, marking the trial launch of China's oil shipping program with its Southeast Asian partners.

Experts say the waterway will serve as an alternative to the Strait of Malacca as a route for oil shipping and help to ensure oil supply to Yunnan and southwest China at large.

The Mekong River rises on the Qinghai-Tibet Plateau and flows through China, Myanmar, Laos, Thailand, Cambodia and Vietnam to the South China Sea. It is called Lancang River in China.

In March this year, China signed a landmark agreement with Laos, Myanmar and Thailand on refined oil shipping on the waterway. But the agreement allowed a monthly shipping quota of only 1,200 tons of oil out of safety concerns.

The three Southeast Asian nations, however, later agreed to raise the quota after China had set up an emergency response team to ensure the oil shipping safety on the river, said Qiao Xinmin, chief of the provincial maritime affairs bureau, on Thursday.

China would ship around 70,000 tons of refined oil each year from Thailand alone via the Mekong River thanks to the rise of the quota, Qiao said.

Experts estimated that a total of 200,000 tons of refined oil would be shipped to Yunnan via the waterway when the quota was scrapped, adding that the transportation cost per ton was 200 yuan (US$25.6) less than that by land.

Qiao said more than 20 experts from China, Laos, Myanmar and Thailand were checking ports and oil shipping facilities along the river, studying the feasibility of shipping larger amounts of refined oil.

Officials from the four countries believe the program will help boost transport cooperation on the Mekong, which opened to commercial navigation 16 years ago.

The river has become a tourist route and major transport channel for ore, produce and commodities between China and members of the Association of Southeast Asian Nations (ASEAN).

In the past five years, the river has carried up to two million tons of goods, representing trade worth more than 10 billion yuan (US$1.28 billion), Qiao said.