October 4, 2011 / 1:11 AM / 9 years ago

China's CNPC says Myanmar pipeline work continues despite dam row

BEIJING, Oct 4 (Reuters) - China National Petroleum Corp (CNPC) continues work on an oil pipeline through Myanmar and has given aid to show its goodwill, the official Chinese news agency said after Myanmar abruptly halted work on a Chinese-led power dam.

The Xinhua news agency said construction of the pipeline was “proceeding smoothly” and that CNPC said it gave $1.3 million to Myanmar on Monday to help build eight schools, as part of an agreement signed in April to provide $6 million of aid.

China’s long close relationship with Myanmar faltered after the Myanmar government last week suspended a controversial $3.6 billion, Chinese-led hydro-power project.

Any uncertainty about the oil pipeline project would be a fresh blow to China’s ties with Myanmar, whose President Thein Sein told parliament on Friday that his government would shelve the dam project until his five-year term ends in April 2016.

CNPC began building a crude oil port on Maday island on Myanmar’s western coast in November 2009 as part of a crude oil pipeline connecting the port with the Chinese border town of Ruili. It is scheduled to be completed in 2012 and designed to carry 12 million tonnes of crude oil a year.

The northern dam would flood an area about the size of Singapore, creating a 766-square-km (296-square-mile) reservoir, mainly to serve China’s growing energy needs. (Reporting by Chris Buckley; Editing by Ed Lane)

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