Yangon  - China has started building a workboat wharf as a first step in its project to construct a 771-kilometre overland gas pipeline from Myanmar's Rakhine state to Yunnan, state media reported Saturday.

Chinese National Petroleum Corp on October 31 began the wharf in Madekyun in the western state as the first step in the pipeline project, The New Light of Myanmar newspaper reported.

"The Myanmar-China rude pipeline will extend for 771 kilometres from Kyaukryu port to Ruili of Yunnan province in China with a designed annual deliverability of 12 million tons at the first stage," the company said in a statement.

China hopes to build the overland pipeline as a means of supplying natural gas from Myanmar's offshore fields direct to its southern province of Yunnan.

On Thursday, China National Offshore Oil Corp began new tests wells in its concession in the Mottama offshore block off Myanmar's south-east coast, The New Light of Myanmar said.

"It is learnt that hydrocarbon was found in three test wells in the first campaign in the 2008 open season," the government mouthpiece said. "There are prospects for other new natural gas deposits in Mottama offshore region." (dpa)