Myanmar Seizes Rebel-Held Town Near China Oil and Gas Projects

Myanmar’s army seized control of a rebel-held town on its border with China, raising concern a 20- year ceasefire accord could collapse, threatening planned oil and gas projects in the region.

Rebels attacked Myanmar police patrolling a border gate in the Kokang-controlled area of northeastern Shan state, killing at least one, the Washington-based U.S. Campaign for Burma said in a statement late yesterday. Businesses are closed and more than 10,000 Kokang refugees have fled across the border into China on concern fighting will break out, the group said.
“The junta should withdraw its additional troops sent to Kokang,” Peng Jiasheng, who heads the local rebel army, said in a statement released through U.S. Campaign for Burma. He called a new committee set up by the regime to administer the area “illegal and illegitimate.”

Myanmar has Asia’s seventh-largest natural gas reserves, an energy source China is keen to tap to help fuel economic growth. South Korea’s Daewoo International Corp. said this week it would invest 2.1 trillion won ($1.68 billion) in a Myanmar gas project to supply China National Petroleum Corp., that country’s largest oil company.

Myanmar has increased its foreign currency holdings fourfold since 2004 to $3.6 billion, mostly on oil and gas sales to China and Thailand. Talks continue on how construction costs for an 825-kilometer (513-mile) overland gas pipeline may be split, Daewoo International said.

Bloomberg