Chapter 4: The Belt and Road Initiative
4.2 Energy-Related Components of the Belt and Road Initiative
國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
the full array of projects that fall under One Belt One Road; if such a document exists, it does not appear to be publicly available.191 Some projects are mentioned directly in
“Building the Belt and Road,” and others are featured in publications by Xinhua, the Chinese state media outlet. However, projects listed in official documents tend to be ones appear to be successful, and in some cases their “progress” may be overstated.192 More comprehensive lists can be found in secondary compilations, but even these are not necessarily complete due to the sheer number of projects under One Belt One Road’s umbrella. That said, projects of greater importance will receive greater attention, and will likely be properly accounted for in both official documents and secondary sources.
4.2 Energy-Related Components of the Belt and Road Initiative
The China-Pakistan Economic Corridor, the China-Central Asia-West Economic Corridor, the Bangladesh-India-Myanmar Economic Corridor, and the
China-Mongolia-Russia Economic Corridor are the components of the Belt and Road Initiative that will have the greatest impact on China’s energy security. While there are certainly projects across all six corridors that are in some way related to energy, this paper will ignore projects intended to provide energy to the partner country (i.e. hydropower and transmission line projects) and focus on those projects relevant to China.
The section of “Building the Belt and Road” titled “Enhancing Transport” discusses how China has signed bilateral and multilateral agreements facilitating transportation,
191 The leaking of a “master plan” for the China-Pakistan Economic Corridor suggests that an overall document could exist.
192 For example, “Building the Belt and Road,” published in May 2017, states that construction has started on Line D of China-Central Asia Gas Pipeline, but “The Central Asia-China Gas Pipeline Network: Line D(ead),”
published in March 2017 reports that the pipeline has been “indefinitely suspended.” Casey Michel, "The Central Asia-China Gas Pipeline Network: Line D(Ead)," The Diplomat, http://thediplomat.com/2017/03/the-central-asia-china-gas-pipeline-network-line-dead/.
46
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
opening “356 international transport routes running through 73 land ports” as well as signing
“38 bilateral or regional ocean shipment agreements with 47 B&R [Belt and Road]
countries.”193 Similarly, “Promoting Relevant Projects” names railways, ports, and tunnels that China has contributed to, in order to “create a transport infrastructure network connecting the sub-regions in Asia and linking Asia, Africa and Europe as well.”194 The cooperation priority “Promoting Orderly Maritime Cooperation” has the sub-section “Cooperation on Connectivity” which also discusses how China has contributed to the development of ports, particularly the Gwadar Port in Pakistan and the Port of Hambantota in Sri Lanka.195 The most obviously relevant sub-section is “Connecting Energy Facilities.” Here it states “China is active in cooperating with relevant countries to promote their energy connectivity, build oil, gas and power infrastructure, maintain the safe operation of energy resources among
countries and regions.”196 According to this section, the China-Russia Oil Pipeline and the China-Central Asia Pipelines A/B/C are all operational, with work having started on eight of sixteen projects in the China-Pakistan Economic Corridor.197
4.2.1 China-Pakistan Economic Corridor
The China-Pakistan Economic Corridor (CPEC) is one of the six economic corridors that One Belt One Road promises to develop, and the crown jewel of CPEC is the city of Gwadar, in the Pakistani province of Balochistan. As a port city on the Indian Ocean, Gwadar is intended to be “a hub of connectivity for the [China-Pakistan Economic] Corridor, and an
193 Office of the Leading Group for the Belt and Road Initiative, Building the Belt and Road: Concept, Practice and China's Contribution, 20-21.
194 Ibid., 22.
195 Ibid., 39.
196 Ibid., 22.
197 Ibid.
47
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
indispensable interchange for the Silk Route [sic].”198 Back in 2015, President Xi pledged that China would invest $46 billion into Pakistan’s infrastructure, most of which would be allocated towards CPEC and the construction of roads, rails, and pipelines connecting
Gwadar to Kashgar in Xinjiang.199 The port became operational in November 2016,200 and as of December 2016, China has pledged to contribute a total of $9.7 billion USD (1 trillion Pakistani Rupee) for the construction of more than 1250 kilometers of roadway through Balochistan.201
Other energy-related projects in Gwadar include the planned construction of both an oil pipeline and a gas pipeline, as well as the construction of an LNG (liquefied natural gas) terminal. The 700-kilometer gas pipeline and refinery would be geared more towards Pakistan’s domestic use, connecting Gwadar to the Pakistani city of Nawabshah, but could potentially be extended in the future.202 The Pakistani state construction company Frontier Works Organization will oversee the planning and construction of an oil pipeline linking Gwadar to western China. Furthermore, it is reported that Huanqiu Contracting and
Engineering Corporation has expressed an interest in building an oil refinery in Gwadar.203
198 "Gwadar Port City," Pakistan-China Institute
China Radio International, http://www.cpecinfo.com/gwadar-port-city.
199 Jack Detsch, "China's Grand Plan for Pakistan's Infrastructure," The Diplomat, www.thediplomat.com/2015/04/chinas-grand-plan-for-pakistans-infrastructure/.
200 "'Today Marks Dawn of New Era': Cpec Dreams Come True as Gwadar Port Goes Operational," Dawn, https://www.dawn.com/news/1296098.
201 Syed Irfan Raza, "China to Finance Three More Road Projects under Cpec," Dawn, https://www.dawn.com/news/1304619.
202 "Gwadar-Nawabshah Pipeline, Lng Terminals: All Projects Will Be Completed on Time, Says Official," The Express Tribune, https://tribune.com.pk/story/1101858/gwadar-nawabshah-pipeline-lng-terminals-all-projects-will-be-completed-on-time-says-official/.
203 Zafar Bhutta, "Pakistan Working on Gwadar-China Oil Pipeline," The Express Tribune, https://tribune.com.pk/story/1140506/crude-export-pakistan-working-gwadar-china-oil-pipeline/.
48
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
4.2.2 China-Central Asia-West Asia Economic Corridor
The China-Central Asia-West Asia Economic Corridor is notable for its pipelines.
The China-Central Asia Gas Pipeline actually consists of four pipelines, three of which were completed even before One Belt One Road was announced.204 When the first three lines begin operating at capacity, they will allow China to import 55 billion cubic meters (bcm) a year from Central Asia (primarily Turkmenistan), and the completion of the fourth line will boost the total throughput of the pipeline system to 85 bcm.205
4.2.3 Bangladesh-China-India-Myanmar Economic Corridor
The Bangladesh-China-India-Myanmar Economic Corridor (BCIM) has received much less media attention than the others. Like the China-Central Asia Gas Pipeline, the BCIM predates One Belt One Road, but discussions have stalled since December 2014.206 While little progress has been made overall, China has made some progress in Myanmar. Its biggest priorities there have been the completion of twin gas and oil pipelines running from Myanmar to Kunming and the development of Kyaukpyu Port in Myanmar. The China-Myanmar oil and gas pipelines were completed in 2014 and run from the port of Kyaukpyu to the city of Kunming.207 The gas pipeline accounted for roughly 5% of China’s natural gas imports in 2016,208 and when the oil pipeline reaches full capacity it will be able to supply
204 "Flow of Natural Gas from Central Asia," CNPC,
http://www.cnpc.com.cn/en/FlowofnaturalgasfromCentralAsia/FlowofnaturalgasfromCentralAsia2.shtml.
205 Ibid.
206 Sutirtho Patranobis, "India, China to Resume Stalled Dialogue on Corridor with Myanmar, Bangladesh,"
Hindustan Times, http://www.hindustantimes.com/india-news/india-china-to-resume-stalled-dialogue-on-corridor-with-myanmar-bangladesh/story-e0NS1tHwKQCaOWmQwGp5tJ.html.
207 "China Opens Delayed Myanmar Oil Pipeline to Get Mideast Crude Faster," Bloomberg,
https://www.bloomberg.com/news/articles/2017-04-11/china-opens-delayed-myanmar-oil-link-to-get-mideast-crude-faster.
208 Ibid.
49
‧
roughly 6% of China’s crude oil imports.209 A consortium of Chinese companies also won a bid to build another deep-sea port in Kyaukpyu, which would facilitate future oil
shipments.210
4.2.4 China-Mongolia-Russia Economic Corridor
An economic corridor that has also received a comparatively low amount of attention is the China-Mongolia-Russia Economic Corridor. China, Mongolia, and Russia did not sign a trilateral economic agreement formalizing the corridor until June of 2016.211 The agreement covers 32 projects, thirteen of which are related “transportation infrastructure” such as
railways and highways, and only one of which has to do with energy.212 While not included in the trilateral agreement, an important energy project in this region is what is referred to in the “Building the Belt and Road” document as the “China-Russia Oil Pipeline.” Russia began sending China oil through the Eastern Siberia-Pacific Ocean (ESPO) pipeline in 2011.213 The offshoot carrying oil from the ESPO pipeline to China has an annual capacity of 15 million tons, and a second spur (expected to be completed in 2018) would double that to a total of 30 million tons per year.214 China has also made long-term plans to import Russian natural gas through pipelines. Construction on the first pipeline began as part of a $400 billion deal for 38 bcm of Russian natural gas each year, and this pipeline is expected to come online at the
209 Lucy Hornby, "China and Myanmar Open Long-Delayed Oil Pipeline," Financial Times, https://www.ft.com/content/21d5f650-1e6a-11e7-a454-ab04428977f9.
210 Aung Hla Tun and Timothy Mclaughlin, "China's Citic Wins Projects to Develop Myanmar Economic Zone," Reuters, http://www.reuters.com/article/myanmar-citic-project-idUSL3N14K1D720151231.
211 Peter Bittner, "China, Russia, Mongolia Sign Long-Awaited Economic Partnership Agreement," The Diplomat, http://thediplomat.com/2016/06/china-russia-mongolia-sign-long-awaited-economic-partnership-agreement/.
212 Dulguun Bayarsaikhan, "Over 30 Projects Lined up for Trilateral Economic Corridor," The UB Post, http://theubpost.mn/2016/06/29/over-30-projects-lined-up-for-trilateral-economic-corridor/.
213 Albing Guo, "Cnpc to Start Laying Second China-Russia Oil Pipeline in June," Bloomberg,
https://www.bloomberg.com/news/articles/2016-05-12/cnpc-to-start-laying-second-china-russia-oil-pipeline-in-june-io48uk3h.
214 Aizhu Chen, "China to Complete Russia Oil, Gas Pipeline Sections by End-2018: Vice Governor," Reuters, http://www.reuters.com/article/us-china-silkroad-russia-pipelines-idUSKBN18819I.
50
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
end of 2018.215 Plans are being floated for a second pipeline that would carry 30bcm per year from West Siberia over 30 years.216