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Thread: Gwadar seaport holds key in China's energy search

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    Gwadar seaport holds key in China's energy search

    Gwadar seaport holds key in China's energy search
    Syed Fazl-e-Haider says the Gwadar seaport will play a key role in its joint projects with Pakistan

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    A Pakistani soldier at the newly built Gwadar port. Photo: AP
    China is expected to take operational control of the strategically located Gwadar port on Pakistan's southwestern coast this month. The state-run Chinese Overseas Port Holdings has bought the shares of Singapore's PSA International, the concession holder and operator of the port, under a deal approved by the Pakistan government.

    China had contributed US$220 million to the construction of the seaport.

    PSA was initially contracted to manage and develop the port for 40 years but decided to quit it last year after Pakistan failed to transfer 236 hectares of land in the Pakistan navy's hands for development. The port has so far remained a commercial failure, as it still lacks road and rail connectivity to the rest of the country.

    Now China has become the builder and operator of an Arabian Sea port, near the Strait of Hormuz. By virtue of its strategic location, the port can become a major outlet for trade between China, Central Asia and the Gulf region.

    Furthermore, energy-hungry China can achieve its strategic objectives associated with energy security through its presence in Gwadar. The port is China's favourable choice for oil trade: oil imports from Iran, the Gulf states and Africa can be transported overland to northwestern China through the port.

    Previously planned projects, such as the development of a Pakistan-China energy corridor, may also materialise. China has already proposed to develop a petrochemical city with an oil refinery in Gwadar. In 2007, the Chinese company Great United Petroleum Holdings carried out a feasibility study of the US$13 billion petrochemical city.

    The establishment of a dry port at Sost, near the Pakistan-China border, the oil refinery in Gwadar, the proposed rail and road projects, and the expansion of the Karakoram Highway - these are all moves over the past decade towards building an energy corridor.

    Gwadar has the potential to play a major role in serving as a corridor for energy, cargo and services between Central Asia, the Gulf and other surrounding regions. Western China can benefit from the port through the Sost dry port, which will also boost economic activity along the proposed highway linking Gwadar with the Karakoram Highway in the north.

    The movement of oil and trade between Pakistan and China will obviously gain momentum when Gwadar is linked with the highway.

    The Chinese have already built the railway to Tibet and its extension to Pakistan will lead to a faster movement of cargo between the two countries.

    However, despite the progress, China will face a daunting security challenge due to increasing lawlessness in the insurgency-hit Baluchistan province.

    Syed Fazl-e-Haider is a development analyst in Pakistan

    Gwadar seaport holds key in China's energy search | South China Morning Post
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    Senior Member Felix's Avatar
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    Re: Gwadar seaport holds key in China's energy search

    Im really kean to see how things develop in the next 5 years. Exciting times ahead!

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    Dragon at Gwadar

    Dragon at Gwadar
    Feb 15, 2013



    Arun Kumar Singh

    As a reaction to the US’ “Pivot Asia” policy, the Chinese are debating a new policy, “Marching West” i.e. to focus on increasing Chinese influence and presence in South Asia, West Asia and Central Asia. The first beneficiary of this new initiative appears to be China’s all weather ally and nuclear proxy, Pakistan.

    On February 1, 2013, the Pakistani government terminated its March 2007 agreement (valid for 40 years) and transferred the management-cum-development of the Gwadar port from the Port of Singapore Authority International to China’s Overseas Port Holdings. Sixty per cent of China’s oil imports transit through the Strait of Hormuz, located just 180 nautical miles (nm) from the Gwadar port. This strategic port, on the Balochistan coast, near the Iranian border, will be used by Chinese oil tanker ships to offload crude oil from West Asia. That is why, from Gwadar, there’s a proposed rail, road link and pipeline to transport oil and other goods to China, thus avoiding the Malacca and Singapore straits which can be closed during wartime or are vulnerable to piracy.

    The Chinese are not just helping Pakistan build the Gwadar port, but have provided practically all the funding.

    These developments, when seen along with the Chinese-built ports in Hambantotha (Sri Lanka) and new terminals at Chittagong and Sonadiya port (both in Bangladesh), and China’s move into the Maldives (where it’s reportedly providing “security assistance”), indicate troubled times ahead for India, as they complete the final links in the Chinese “string of pearls” strategy — to safeguard its sea lanes for energy imports, encircle India and dominate the Indian Ocean region.

    It will take China about 20 years to convert the Gwadar port into a full-fledged naval base comprising facilities to repair warships and submarines, set up ammunition dumps for arming them, and build a suitable airfield for maritime surveillance and interdiction using drones and aircraft. And it is true that in the event of war, the Gwadar port and its installations could be destroyed by the Indian Navy and Air Force (as well as the US Navy), using land attack cruise missiles and fighter aircraft, but such an action against China and Pakistan — two nuclear powers — would have serious repercussions.
    Work on Phase 1 of the Gwadar port commenced in March 2002 and was formally completed in March 2005, though ships had started using it by 2003.

    The total cost of this phase was $248 million (of which the Chinese contributed $198 million). The Gwadar port has a 4.5 km approach channel of 11.5 metre depth, and three multipurpose berths. Pakistan’s former President Pervez Musharraf is reported to have stated, “In the event of war with India, Pakistan will not hesitate to invite the Chinese Navy to Gwadar”.

    Phase 2 was completed in January 2006, with nine additional berths and the approach channel was deepened to 14.5 metre, thus permitting larger ships of about 50,000 DWT (deadweight tonnes) to enter and leave the port. The port was formally inaugurated in March 2007, and the Pakistan Navy is reported to have set up a base there. It may be noted that all oil tankers from the Gulf bound for India’s Vadinar Oil Terminal in the Gulf of Kutch generally pass about 40 nm south of Gwadar port and would be vulnerable to interdiction by Pakistani or Chinese units based at Gwadar. Some unconfirmed media reports indicate the possible presence of a Chinese electronic “listening post” at Gwadar.

    To fully understand the implications for India, we need to note that 70 per cent of India’s oil imports come by sea, from the Gulf (with tankers exiting through the Strait of Hormuz). Seventy per cent of our imported oil arrives at ports in the Gulf of Kutch, the Gulf of Cambay and the Mumbai port. Indeed, in 2007, the Gulf of Kutch received 1,100 oil tankers (passing some 40 nm from Gwadar), and this number will grow to 2,100 by 2012 and over 4,000 tanker ships by 2025, when India’s oil imports would have quadrupled to 320 million tonnes (China’s imports would also rise to over 600 million tonnes and hence the possibility of conflict of interest between these two largest consumers of oil).

    The global strategic implications are also serious since the Gulf region has 75 per cent of the world’s proven oil reserves and 50 per cent of the world’s proven gas reserves. About 16 million barrels of oil pass through the Strait of Hormuz daily on tanker ships (worth over $200 billion annually). This amounts to over 90 per cent of the oil exported by the Gulf region and over 40 per cent of the entire world’s oil trade.

    The Chinese Navy’s activities in the Indian Ocean region need to be monitored as closely as we monitor Pakistani-based terrorist moves. Thanks to availability of shale oil deposits in the Exclusive Economic Zone (EEZ) of the US, new oil fields in Russia, and oil fields off Brazil’s EEZ, West Asia may not remain the primary source of global oil after 2030, but its proximity to India will still ensure that it’s of great strategic importance to us as an energy source. China now imports more oil from West Africa (Nigeria and Angola) than it does from West Asia, and this oil will still need to move by sea through the Malacca and other straits in Southeast Asia (Sunda and Lombok). However, in a crisis situation, China does have the option to move this West African oil to Gwadar port and then pump it to China via the proposed land-oil pipeline.

    The time for fence sitting is over. We need a strong 200 ship Indian Navy, inclusive of 12 tactical nuclear submarines (SSNs) and 500 aircraft. In addition we need allies, amongst like-minded maritime nations of the Indo-Pacific Region, and we need to take bold decisions befitting a nation which will have the third largest GDP in the world by 2030.

    The writer retired
    as Flag Officer Commanding-in-Chief of the Eastern Naval Command, Visakhapatnam

    Dragon at Gwadar | The Asian Age

  4. #4
    Member Jade's Avatar
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    Re: Dragon at Gwadar

    Yes, it concerns India, and I agree with OP that India need a strong 200 ship Indian Navy, inclusive of 12 tactical nuclear submarines (SSNs) and 500 aircraft. I would also add three aircraft carrier battle groups to the list to neutralize this threat.

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    Senior Member Felix's Avatar
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    Re: Dragon at Gwadar

    Quote Originally Posted by Jade View Post
    Yes, it concerns India, and I agree with OP that India need a strong 200 ship Indian Navy, inclusive of 12 tactical nuclear submarines (SSNs) and 500 aircraft. I would also add three aircraft carrier battle groups to the list to neutralize this threat.
    India are so concerned and your answer sir is based on increasing the spending?? Where would the funding come from? Draining the finances is no solution to an already ailing financial glut.

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    Senior Member Dash's Avatar
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    Re: Dragon at Gwadar

    In the emerging geopolitical environment, I do not think that Pakistan would be interested in converting a project of immense commercial value into a contentious Chinese Naval Base. Neither would the Chinese want to position their navy which would alarm the region as well as the US and the its western countries. As it is not in the interest of both the countries to convert it to a naval base, I wonder why are the Indians so flustered about it. The reason - India does not want Pakistan to become a gateway and a commercial hub of Greater Central Asia. This would further lessen India's already diminishing geopolitical and geo-strategic clout. Unfortunately for the Indians, the Americans also seem interested in letting the port develop into a hub of trade and commercial activity and an apparent US China entente is already underway in this regard.
    The Following User Says Thank You to Dash For This Useful Post: Aryan_B


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    Re: Dragon at Gwadar

    Quote Originally Posted by Faheem View Post
    India are so concerned and your answer sir is based on increasing the spending?? Where would the funding come from? Draining the finances is no solution to an already ailing financial glut.
    Fine, what would you do if you were in India's position.

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    Senior Member Felix's Avatar
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    Re: Dragon at Gwadar

    Quote Originally Posted by Jade View Post
    Fine, what would you do if you were in India's position.
    Make better relations. Stop jumping up and down at neighbours having closer relations.

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    Re: Dragon at Gwadar

    Quote Originally Posted by Faheem View Post
    Make better relations. Stop jumping up and down at neighbours having closer relations.
    Sometimes it is easy to be enemies than be friends. India and Pakistan are born out of ideological differences. Nothing can bring India and Pakistan closer, unless India cease to a 'Hindu' country and Pakistan a 'Muslim' one.

    The matter between India and China is little different. India and China have bigger border dispute than Indo Pak, but have no ideological differences, hence befriending Chinese is easier.

    Anyway, Chinese will not take any steps that will antagonize India too much. China recognize that overt display of power in Indian Ocean Rim will give Carte Blanche to Indians to act against China. The writer of the OP is a military personnel. The objective of the article to make a case for budgetary increase for Navy. Budget is due in 15 days.

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