Pakistan’s Gwadar Port, which was built with China’s aid and won the bid to operate by Chinese companies, was grandly launched on November 13, 2016. This is undoubtedly a landmark project for China-Pakistan economic and trade cooperation and the entire China-Pakistan Economic Corridor. As the home country of the builder and operator, we certainly hope that this port can play an important role in Pakistan's economic development and thus achieve its own sustainable development. However, this port has basically nothing to do with China’s energy imports. The “Middle East-Gwadar-China” oil and gas transportation route is unreasonable in terms of safety and economics.
Advocates of the "China-Pakistan Oil and Gas Pipeline" concept claim that Persian Gulf oil and gas will be landed at Gwadar Port and transported to China via land, which is 85% shorter than the full sea transportation to China, and can be cracked The "Malacca Dilemma" of China's energy import security; Around the Spring Festival in 2015, a report titled "Pakistan's third largest port operated my country's oil transportation lines shortened by 85% in April" spread like wildfire on the Internet. This statement is basically The premise concepts and conclusions are misleading; in fact, the "Middle East-Gwadar-China" oil and gas transportation route is unreasonable whether in terms of safety or economics.
The basic premise of the theory that “China-Pakistan oil and gas pipeline shortens the distance of oil and gas transmission from the Persian Gulf to China by 85%” is that it ignores that China is a large country with vast territory, and there are significant regional development gaps, including population, economic activities, oil Most natural gas consumption is distributed in the eastern coastal and central areas far away from Xinjiang. When Persian Gulf oil and gas reaches Chinese ports, it directly reaches China's main consumer markets. If it is transported to Kashgar via Gwadar Port, it still needs to go through 4,000 kilometers to 6,000 kilometers of pipelines and railways. Only through transshipment can we reach the eastern and central consumer markets, and the actual transportation distance cannot be shortened by 85%.
At the same time, it is precisely because high-cost land transportation replaces low-cost, high-volume sea transportation that the "China-Pakistan Oil and Gas Pipeline" concept is destined to be unsuccessful even if the increased security costs are not considered. economical. In terms of related infrastructure construction, even for oil and gas pipelines constructed in areas with uncomplicated terrain conditions, the input-output ratio is lower than that of maritime transportation. With the same investment of US$2 billion, about 1,000 kilometers of oil pipelines can be built for pipelines, with an annual transportation volume of 30 million tons; for maritime transportation, 20 very large crude carriers (VLCC) can be built, with an annual transportation volume of 40 million to 60 million tons. tons; the liquidity of the two types of assets is even more disparate.
The entire infrastructure for China's maritime oil and gas transportation is generally complete, but the corresponding infrastructure for the imagined "China-Pakistan oil and gas pipeline" needs to be built from scratch. The host country Pakistan cannot even guarantee a stable power supply. A series of power generation projects under the framework of the China-Pakistan Economic Corridor will solve this problem for them. Not to mention that going from Gwadar to Kashgar requires crossing the Karakoram Pass, which is five or six kilometers above sea level. This imaginary pipeline requires the construction of extremely powerful pumps. Station, it is also necessary to provide additional heating and insulation facilities for pipelines in plateau areas, which requires even higher investment.
After entering the country, the pipeline from Kashgar to the major consumer markets in the east and central China also needs to cross thousands of kilometers of desert Gobi, and the construction cost is also much higher than that in ordinary plains.
In terms of transportation costs, the imagined China-Pakistan oil and gas pipeline cannot be compared with sea transportation. A Japanese scholar once described the low transportation cost of modern very large oil tankers, claiming that the transportation of Saudi crude oil to Japan is "zero cost" and that the Persian Gulf is close to Japan's "local oil field"; today, the shipping cost of Persian Gulf crude oil to China's eastern coast is The low level also makes the Persian Gulf like the “local oil field” in eastern China.
According to data from the February 2010 research report "Realistic and Strategic Consequences of Seaborne Imports: China's Dream of a Secure Oil Pipeline" by Andrew Erickson and Gabriel Collins, oil tankers from Saudi Arabia The 7,000-kilometer sea freight from Tanura to Ningbo is US$1.25/barrel. Calculated based on 1 ton equivalent to 7 barrels, equivalent to 8.75 US dollars/ton; and then converted based on the central parity rate of RMB against the US dollar on November 22, 2016 of 6.8779 yuan, approximately RMB 60.1816 yuan/ton. If oil and gas from the east coast of Africa can be supplied to China in the future, the shipping cost will be roughly the same. In comparison, the same report estimates that if oil is transported through the imagined China-Pakistan oil pipeline, the transportation cost of 10 million tons per year will be US$1 billion higher than that of sea transportation, which means that the transportation cost per ton is 100 US dollars higher. Dollar.
Coupled with the freight from Xinjiang to the main consumer markets in the mainland, the total transportation cost is close to 1,000 yuan/ton, which is equal to 16.6 times the cost of shipping crude oil from Saudi Arabia to Ningbo. On November 22, 2016, the Brent crude oil futures price was 49.09 US dollars/barrel. Calculated based on 1 ton equivalent to 7 barrels and the central parity rate of RMB against the US dollar of 6.8779 yuan, which is approximately 2363.4528 yuan/ton. The imagined transportation cost of the China-Brazil oil pipeline It reaches 42% of the international market crude oil price, and the shipping cost is equivalent to 2.5% of the international market oil price. This shows the low competitiveness of the crude oil transported through the China-Brazil oil pipeline.
At the same time, with the growth of U.S. oil and gas exports and the opening of the new Panama Canal, global oil and gas trade transportation routes are quietly being adjusted. In addition to Persian Gulf and African oil and gas, eastern China seaports can also be transported at a competitive rate. The cost is to accept oil and gas from the United States and Venezuela, and may also add oil and gas from Brazilian presalt formations in the future, thereby improving its facility utilization and reducing shared costs.
Considering that Venezuela’s oil reserves exceed those of Saudi Arabia, Brazil’s pre-salt oil fields are regarded as the world’s largest oil discovery since the new millennium. Its reserves are conservatively estimated to be about 50 billion barrels. According to the Oil and Gas Research Center of the Federal University of Rio de Janeiro in Brazil in 2015 The report states that 90% of its recoverable reserves may reach 176 billion barrels, and 10% may reach 273 billion barrels. The International Energy Agency's "2013 World Energy Outlook" report even predicts that Brazilian oil production will account for 30% of the world's new supply in 2035. One-third; if the Nicaragua Canal can be built, the flow and cost of this transportation line will be more competitive. In contrast, the Gwadar route cannot do this, exacerbating its cost disadvantage.
From a security perspective, the so-called "Malacca Dilemma" is largely a false proposition. This concept first emerged in Japan during the Cold War. At that time, Japan's oil and gas energy supply was highly dependent on the Persian Gulf. Its allies, the United States, Britain and Western countries controlled the security lifeline of the Persian Gulf's oil sources. It was assumed that the only enemy that could cut off Japan's oil, gas and other cargo transportation was the Soviet Navy. The throat is the Strait of Malacca.
The situation facing China today is different. The "imaginary enemies" that may cut off sea transportation are the navies of the United States, Britain and India. Since the U.S. and British navies control the security of oil sources in the Persian Gulf, the U.S. Central Naval Command and the Fifth Fleet are stationed in Bahrain. The British permanent military base in Mina Salman Port, Bahrain, also started construction at the end of 2015. In addition, At military bases in Saudi Arabia and other Gulf countries, if they want to cut off the supply of oil and gas from the Persian Gulf to China, they only need to directly supervise the Gulf countries to close oil valves without resorting to the Strait of Malacca. Coupled with the Diego Garcia base located in the Indian Ocean, they can block oil and gas export ports on the African Indian Ocean coast without resorting to the Strait of Malacca. Even if the Chinese navy wants to fight with the US, UK and Indian navies to ensure oil and gas supplies in the Persian Gulf and Africa, the Arabian Sea and Indian Ocean that Gwadar Port faces are obviously more likely to allow imaginary enemies to sit back and reap the benefits than the South China Sea.
At the same time, the imagined China-Pakistan oil and gas pipeline will not only fail to increase the security of China’s oil and gas imports, but will instead increase security risks. This is not only reflected in the fact that the Arabian Sea and the Indian Ocean are not as good as the South China Sea for the Chinese navy, but also in the fact that land risks have increased sharply from scratch. After all, Pakistan is a war-torn country with active anti-government armed forces. There are strong separatist forces in Baluchistan Province where Gwadar Port is located, and a tragic and large-scale counter-insurgency war has broken out in history; Khyber Pakhtunkhwa The Taliban in Wa Province (Northwest Frontier Province) is deeply rooted and in a semi-independent state; the Pakistani government army has sent 100,000 troops to suppress the rebellion in the Federally Administered Tribal Areas; the Kashmir region is in dispute with India, and military frictions are high? Passing through such areas The security costs of the China-Pakistan oil and gas pipeline are unimaginable.
Moreover, compared with shipping by sea, the China-Pakistan oil and gas pipeline laid on land has greatly lowered the threshold that threatens China's energy imports. Because to effectively threaten China's maritime energy imports, it is necessary to invest tens of billions or hundreds of billions of yuan in building a modern navy; to threaten oil and gas pipelines on land, it can be done by funding hundreds of millions of yuan in weapons and equipment and military expenditures. From this point of view, laying China-Pakistan oil and gas pipelines to ensure the safety of China’s oil and gas imports is exactly the opposite.
Looking at the idea of ??avoiding sea routes for safety from a development perspective, the fallacy is even greater. Because China is already the world's largest manufacturing country and the largest shipbuilding country, China's maritime strength is increasing day by day; the input-output ratio of "maintaining stability" on overseas sea routes is increasingly better than "maintaining stability" on land routes. Under this development trend, the old idea of ??pursuing safety by avoiding sea routes will increasingly deviate from reality; when we formulate security strategies, we should not only focus on the present, but also look to the future.
It may be said that one of the values ??of the China-Pakistan oil and gas pipeline lies in its connection with the future Iranian oil and gas pipeline, but this is not the case. Because even if Iranian oil and gas is transported to China through pipelines, the Central Asia-Northern Xinjiang route is safer and more economical than the Pakistan route, and multiple existing pipelines can be used. Not only that, Iran may not be willing to export oil and gas to China through Pakistan. From Saudi Arabia and other Gulf countries to Iran, they are not very happy to see the China-Pakistan Economic Corridor advance, let alone see the planned scale of this corridor being too large, because this will reduce the relative status of their investments in Pakistan and weaken their investment in Pakistan. influence. To a large extent, it is due to such considerations that Saudi Arabia hopes that China’s “One Belt, One Road” plan will focus its investment in East and Southeast Asia and invest less in West Asia.
Look further at the energy security goal we are pursuing. China’s energy security goal should not be to maintain the amount and pattern of energy consumption in peacetime during wartime. It is wrong to invest resources for such an unreasonable goal. . China is the world's largest industrial country and a major exporter. A large part of its industrial production is oriented to the export market. It is impossible to maintain such an export scale during wartime. This will significantly reduce the amount of money consumed in producing and transporting export goods in peacetime. Oil and gas energy.
Even if there is an extreme situation where maritime transportation of imported oil and gas from the Persian Gulf is temporarily interrupted, domestic production capacity and oil and gas resources imported from surrounding land neighbors will be enough to meet demand. In peacetime, in order to ensure the market competitiveness of downstream industries, it is not appropriate to use domestic and surrounding high-cost oil and gas, but this is not the case in wartime. Moreover, China has the richest coal resources in the world. In order to maintain the competitiveness of its manufacturing industry and the entire national economy, China must use as much cheap imported oil and gas as possible. This is especially true during bear markets. During wartime, a considerable part of its oil and gas consumption can be converted into coal.
Since the bear market in primary products since 2012, which may last for 10 to 15 years, has benefited the Indian economy far more than it has benefited Pakistan, it will significantly aggravate the imbalance in the balance of power in the South Asian subcontinent. For the sake of my country's international strategy, balance The balance of power in South Asia weakens the internal motivation of extremist forces in Pakistan to rely more on terrorism due to the unfavorable balance of national power. We must moderately support the Pakistani economy, but this support should mainly be carried out through commercial projects. Our project selection and layout should also We must be objective and calm, and fully consider objective economic laws and security issues. The total amount needs to be moderately controlled, and wishful thinking cannot be allowed.
On this issue, we must prevent certain local interest groups in the country from trying to mislead national decision-making. It is also necessary to prevent some public opinions from overestimating the political and economic value of the China-Pakistan Economic Corridor and misleading national decision-making and social understanding.