Beijing Interested in Pakistan-China Oil Pipeline

SHANGHAI (Interfax-China) -- Beijing is interested in a trans-Himalayan oil pipeline proposed by Pakistan early this year, a Pakistan embassy official said on Monday.

The pipeline is designed to link Pakistan's Gwadar Port with China's Xinjiang, passing through the Himalayas and transporting Middle Eastern crude to China.

"At the moment it is just an idea that we have brought forward, but the Chinese side have said that they are interested," said Naeem Khan, a commercial and economic counselor at the Pakistani embassy in Beijing.

"It would be part of a larger trade corridor. We have already agreed to upgrade the Karakoram highway [between the two countries] and the pipeline would go in tandem with that," the counselor was quoted by Pakistan's Business Recorder as saying.

The proposal for such an oil pipeline was first raised during Pakistan President Pervez Musharraf's official visit to Beijing in late February.

The Chinese government is concerned about the security risks inherent in the fact that the bulk of its oil imports must pass through the narrow Malacca Straits, and if the pipeline were to be built, it would provide an alternative route. China has also been considering pipelines crossing Vietnam and Burma.

According to China's customs authority, China imported 70.33 mln tons of crude and 12.03 mln tons of finished oil in the first half of the year. Crude imports from the Middle East over the period rose by 5.8% to 33.1 mln tons, while crude from Africa was up by 22% to 23.4 mln tons, together accounting for 80.3% of the total volume.

All the Middle East and African crude is shipped along the Indian Ocean, the Malacca Straits and the South China Sea to reach China, sometimes even passing through the Taiwan Strait.

Zhao Gancheng, the director of South Asia Studies at the Shanghai Institute for International Studies (SIIS), said that the new pipeline could enhance energy security, but construction would be fraught with political, economic and security concerns.

"Firstly, Pakistan is not a politically secure place," Zhao told Interfax. "As far as I know, the pipeline route will go through a village with serious ethnic minority problems, and might pass Kashmir, too. China will consider at length the safety of the Pakistan section of the pipeline."

"Secondly, the geological conditions of Pakistan are complex, and the route is designed to cross the Himalayas, so the project cost would be huge," he said.

He said that the Pakistan government was pushing the project because it would stimulate the reconstruction of the Gwadar Port as well as the country's economy as a whole.

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