Mapping Chinese Oil and Gas Pipelines and Sea Routes
P. K. Gautam, “Mapping Chinese Oil and Gas Pipelines and Sea Routes,” Strategic Analysis, 35:4 (2011): 595-612.
Abstract: China is pursuing an energy policy to alleviate its import dependence, diversify the sources and routes of imported oil and prepare for supply disruption. China’s import of hydrocarbons is growing rapidly. Besides sea transport from West Asia and other oil rich countries of both crude and liquefied natural gas, China has also identified diverse import routes for oil and gas by overland pipelines. Some projects are now complete and many are under construction or in the planning stage. China is concerned that growing dependence on imports will create foreign policy and economic pressures that might threaten national security and social and political stability. Safe sea passage of hydrocarbon imports is one driver for energy security. There is an ongoing debate within China whether to ensure a safe sea passage by complementing its blue water by a national tanker fleet or rely on global markets for supply security. Oil and gas routes and pipelines also mirror the operational issue of geopolitics and foreign policy. The article evaluates the current and future developments in Chinese hydrocarbon pipelines and sea routes. It attempts to examine the security and strategic discourse in the unfolding land and sea routes for oil and gas route imports.
Introduction
Like the railway lines of 19th and 20th century, oil and gas pipelines and routes define geo-economic relationships between countries and regions. Unlike Europe’s cobwebs of pipelines, Asia in general and China in particular remain a clear tablet or tabula rasa. Thus to map what exists in China and what is in the ‘pipeline’ will help establish the pattern for the future. Mapping here has two aspects. First is the physical manifestation by way of pipelines and the infrastructure of oil and gas. The second is the conceptual aspect that includes strategic and security issues.
In the near future, oil and gas will continue to be the affordable fuels of choice primarily for the transportation sector, electricity production, and feedstock for fertilisers and domestic use. Oil is import sensitive. Thus the main policy focus in China will be on oil. China is worried that growing dependence on imports will lead to foreign policy and economic pressures that might threaten national security and social and political stability.
Consequently, China is pursuing an energy policy to alleviate its import dependence, diversify the sources and routes of imported oil and prepare for supply disruption. Structurally, after about 20 reforms, China has formed a National Energy Commission (NEC) coordinating 29 state organs including ministries of defence and foreign affairs.
The International Energy Agency (IEA) suggests that China overtook the US in 2009 to become the world’s largest energy user. The Chinese appetite for energy will only grow. Its domestic production of oil and gas is insufficient. China’s domestic production of oil is about 3.63 million barrels per day (mbpd) or 145 million tons (MT) on shore and 15 MT offshore. It ranks fifth in oil production, just behind Iran. China became an importer of oil in 1993 and of gas in 2006. It was well endowed with coal until now. Yet in 2009 it was the biggest coal importer. Conventional oil production in China is set to peak at 3.9 mbpd early in this decade and will then decline. The IEA estimates that by 2020 China could import seven mbpd of crude oil or double today’s imports. (For comparison, despite the financial crisis and slowdown in the economy, Americans consumed 18.5 million barrels per day in 2009. The US imports 10–12 mbpd of oil and its by products).
China’s oil imports are likely to jump from 3.5 mbpd in 2006 to 13.1 mbpd in 2030, while the share of imports in demand will rise from 50 per cent to 80 per cent. In other words, Chinese imports will rise to 200 MT by 2020.
Natural gas is 3.5 per cent of energy mix as in 2009. It is the future fuel of choice in an era of climate change mitigation. In 2008, Chinese gas use was nearly 80 billion cubic metres (BCM). Its demand by 2030 may be 331 BCM. China plans to double its domestic gas production to 160 BCM by 20157 and 137 BCM by 2030. It has agreements to import a minimum of 24 BCM of liquefied natural gas (LNG) by 2011. In addition China will import up to 40 BCM of Turkmen gas by pipeline. Other pipeline imports will be sourced from Kazakhstan and Myanmar. …
