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The New Silk Road: China’s Energy Strategy in the Greater Middle East

May 2nd 2011

China Topics - China's Energy Silk Road
Credit: IEA & National Pipeline Research Society of Japan

Over the past decade, China has increased its energy foothold in the Greater Middle East, encompassing the mainly Islamic countries of Central Asia, the Caucasus, Southwest Asia, and parts of the Balkans and North Africa. Much of this activity has been rooted in China’s tendency to view energy security in geopolitical and strategic terms rather than purely economic terms. In particular, Beijing has been concerned about countering Western energy initiatives in the region. As one Chinese scholar argued, projects such as the Baku-Tbilisi-Ceyhan (BTC) oil pipeline—the first regional pipeline directly supported and controlled by Western countries—imply American motives of containing Russia and China.

Various energy experts have expressed similar views, regarding the BTC as a struggle over control of the Caucasus and Central Asia, and as a U.S. attempt to weaken Russian and Iranian control over Caspian energy resources. Another Chinese analyst described the situation aptly: “In a sense, to control oil and gas pipelines is more important than to possess oil and gas resources.”

In 2002, motivated by these and other considerations, China’s leaders decided that energy security was “too important to be left to market forces alone,” and Beijing has prioritized the issue as a matter of national security ever since. At the same time, as energy projects bring China closer to the European Union’s neighborhood, NATO allies have found themselves having to factor Chinese efforts into more and more aspects of their Eurasia policy.

In 2009, for example, the state-owned China National Petroleum Company completed a natural gas pipeline across Central Asia to Turkmenistan on the eastern shore of the Caspian Sea, even as an EU-backed consortium was working on the Nabucco pipeline to reach Turkmenian gas reserves from the west. In June 2010, Turkmenian president Gurbanguly Berdimuhamedov announced a $2 billion project to connect the eastern pipeline with China to Turkmenistan’s western resources, jeopardizing Nabucco’s viability.

Plans for energy development in NATO’s adjacent Afghanistan theater have faced competition from China as well. U.S. companies and the Asian Development Bank (ADB) have long advocated a gas pipeline from Turkmenistan through Afghanistan to consumers in Pakistan and India, culminating in the proposed Turkmenistan-Afghanistan-Pakistan-India (TAPI) project. TAPI is ostensibly about the transportation of Caspian energy reserves to world market, but it is also about the stabilization of Afghanistan. On December 11, 2010, an intergovernmental agreement was signed in Ashgabat to begin ADBfunded pipeline construction in 2012, with the goal of becoming operational in 2014. Yet the project will have to contend with a rival proposal for Pakistan and India to obtain gas through pipelines from Iran. In March 2009, Tehran and Islamabad closed a deal to build the IP portion of the Iran-Pakistan- India (IPI) pipeline, with the view of bringing either New Delhi or Beijing into the project.

Elsewhere in the region, China has entered the Iraqi energy scene and is now that country’s top oil and gas investor. Indeed, Iraq is viewed as a key new option for the Chinese oil industry, diversifying the imports China already receives from Iran and Saudi Arabia.

Through the lens of these and other energy developments in the Greater Middle East, this article examines how China’s increasing footprint in the region impacts U.S. and allied interests.

Christina Lin, a former visiting fellow at Washington Institute with expertise in energy security, Chinese military doctrine, relations between China and the Middle East, and other issues, wrote this article (of which this is part 1 of 3) for the Institute.

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