Construction began on the China section of the Sino-Myanmar oil and gas pipeline Friday morning in An'ning City in southwest China's Yunnan Province.

CNPC, China's largest oil firm and parent company of PetroChina (PTR.NYSE; 00857.HK; 601857.SH), will build and operate the pipeline whose construction is due to finish in 2013.

The Sino-Myanmar oil and gas pipeline starts at Kyaukryu port on the west coast of Myanmar and enters China at Yunnan's border city of Ruili.

The 2,380-km long oil pipeline will end in Kunming City, capital of Yunnan. It is expected to carry 22 million tonnes of crude oil per annum to China from the Middle East and Africa.

The natural gas pipeline will be even longer, running from Kunming into Guizhou Province and the Guangxi Zhuang Autonomous Region in south China for a total length of 2,806 km. It is expected to transport 12 billion cubic meters of gas to China every year.

The project is the fourth way for oil and natural gas to enter China, after ocean shipping, the Sino-Kazakhstan pipelines and the Sino-Russian crude oil pipeline.

The oil pipeline saves 1,200 km of shipping. It will reduce China's reliance on the Straits of Malacca for oil imports, experts say.

Construction of the pipeline's Myanmar section began in June.

China has imported more than 20 million tonnes of crude oil through the Sino-Kazakhstan oil pipeline that was put into service in 2006, according to statistics from Xinjiang's import authorities.

The Sino-Russian pipeline is expected to begin operations by the end of 2010.

The new pipelines are in line with China's strategy of diversifying the methods and sources of its crude oil imports, said Qin Guangrong, governor of Yunnan.

"It will lessen risks and strengthen China's ability to cope with the complex and volatile international situation," he said.

The project will help quench south and west China's thirst for energy, Qin added.

Construction in An'ning of an oil refinery with an annual capacity of 10 million tonnes also started Friday.

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