(Published article in Defence and Security Alert Jul 2012)
If we can think of great place-names of the past—Carthage, Thebes, Troy, Samarkand, Angkor Wat—and of the present—Dubai, Singapore, Tehran, Beijing, Washington—then Gwadar should qualify as a great place-name of the future.
Central Asia’s Caspian-Caucasus region, with its estimated reserves of approximately 200 billion barrels of oil, is the holder of potentially the nearest and the largest oil and gas reserves to Europe and Asia.
Web of Pipelines
Unfortunately, for exporting of oil and gas, the regional states are dependent upon other transit countries which have direct access to international waterways. Oil and gas pipeline networks have to cross large areas and attract high transit fees before the region’s resources reach the world markets. A brief look at the various oil and gas pipe line routes would be help in appreciating pipeline geo-politics at play.
The shortest route to Arabian Sea ports is the South Eastern “Turkmenistan-Afghanistan-Pakistan (TAP)” route. This has the blessings of the US and India has recently signed agreement for the TAPI pipeline project to partly quench its energy thirst.
The Eastern route is dominated by China since it shares its borders with Tajikistan, Kazakhstan and Kyrgyzstan. China is building a 4000-5000 km long pipe line from Kazakhstan to Xingjiang and beyond as also a 6700 km long pipe line from Turkmenistan, crossing Uzbekistan, Kazakhstan and feeding Chinese markets in Far East.
The western route is favoured by the US as it does not involve Russia or Iran. The pipe lines originate in Azerbaijan (Baku) and end at Supsa in Georgia on the Black Sea. Another route favoured by the US, Georgia and Azerbaijan is the Baku – Ceyhan pipe line, which forms part of the larger plan to develop an East- West axis of influence and commerce in the Eurasian region. Russia’s Blue Stream project plans to connect Turkey with Russia after crossing Black Sea. To counter this the US has planned a Trans Caspian Pipe line (TCP) which is a submarine pipeline between Türkmenbaşy in Turkmenistan, and Baku in Azerbaijan. It would also connect Türkmenbaşy and Tengiz Field in Kazakhstan, bypassing Russia and Iran.
The Southern pipeline routes are strongly opposed by the US as they pass through Iran to end in the Persian Gulf. India is very keen on these routes and is hopeful that the Iran-Pakistan-India (IPI) pipeline would see the light of the day.
The Northern routes are from the Russian Black Sea port of Novorossiysk to Tenzig oil field in Kazakhstan and from Novorossiysk to Baku.
Unfortunately conditions in Afghanistan, the political instability in the Caucasus(Chechnya and to a lesser extent Dagestan),problems with Iran and uncertainties in Pakistan cast a dark shadow on all these endeavours which have the capability of radically transforming the complete region in to a formidable economic powerhouse.
Shortest Route Ports. Due to the geographical locations of Pakistan and Iran to the Caspian region and the fact that both provide the shortest routes to Arabian Sea ports, has led both the countries to progress developing infrastructure and connectivity of their ports with the Central Asian Region(CAR). Apart from oil and gas the ports expect to harvest other trade commodities like cotton, which currently are routed through Russia to Middle East, East Asia and South Asia.
Just over 100 kms apart, Chabahar the Iranian port and Gwadar the Pakistani port are thus competitors for accessing the CAR markets and are rushing to complete transportation corridors to Afghanistan. Both Iran and Pakistan are wooing Afghanistan by giving trade and fees incentives to favour their respective port. Pakistan however fears that “Chabahar port would inflict a huge financial setback for Pakistan”. Interestingly Chabahar is being funded by FDI from India and Gwadar by China.
“An exploding sea bangs against a knife-carved apricot moonscape of high sand dunes, which, in turn, gives way to crumbly badlands………..So now imagine a bustling deepwater port at the extreme south western tip of Pakistan, …..equipped with a highway, and oil and natural-gas pipelines, extending north all the way through ……. the Karakorams, …….. to China’s burgeoning middle-class markets farther east. Another branch of this road-and-pipeline network would go north from Gwadar through a stabilised Afghanistan, and on into Iran and Central Asia. Gwadar, in this way, becomes the hub of a new Silk Road, both land and maritime; a gateway to landlocked, hydrocarbon-rich Central Asia; an exotic 21st-century place-name.”  Kaplan.
Gwadar lies in the Baluchistan province of Pakistan. A province, which is rich in natural resources like oil and gas. In fact, of Pakistan’s ~28tcf gas reserves, ~19tcf are in Baluchistan. The Baloch claim that, despite being the largest gas producer in Pakistan, they receive only 20% of the royalty payments received by the other two gas producing provinces. They thus subsidise the rich provinces, even though they are in fact the poorest in the country and also that nothing much has been done by the government for their development from the vast revenue generated from Baluchistan. No wonder that the Sui gas fields which lie in Bugti tribe controlled region, are the ones most affected by militancy.
Baloch militants pose a credible threat to the vast span of gas pipelines which are not possible to police or monitor effectively (for e.g. The Sui Southern Gas Company has a pipeline network of over 27,500 kms covering Baluchistan and Sindh.).
Current Phase of Insurgency. The Gwadar port development project was commenced in 2002.Millions of dollars poured in to the quiet village of Gwadar from Chinese and Pakistani investors (~$200mn was the Chinese investment for the first phase of the project completed in 2005). The premise was that Gwadar would be converted in to major port hub on the lines of Dubai and the locals would benefit most. The Baloch, soon realised that this was not to be, and that once again their natural resources were being siphoned out by the Central government. In 2006, Pakistani Cobra helicopter gunships and F-16 fighter jets attacked Baloch areas suspected of insurgency; state organised disappearances and kidnappings culminated in killing of the Baloch leader Nawab Akbar Khan Bugti. The Then President Musharraf told his core commanders “the writ of the Pakistani government will never be challenged. Let that be a warning… if anyone challenges the writ of the government, I will crush it.”
‘Great Land Robbery’ story was published in The Herald in Jun 2008, claiming that hundreds of thousands of acres of land had been illegally allotted to non resident military and civilian personnel and resold to builders for residential and industrial purposes. The Baloch realised that their illiterate poor had been deprived of a rightful share in Gwadar’s growth. The insurgent attacks spiralled to about 33 attacks per month in 2009 and continue to this day, Pakistan blames India and Afghanistan for fanning the tribal Baloch sentiments against military excesses and economic exploitation. Many foreign analysts have however not found any credible evidence actively linking India with the Baloch insurgency. Gwadar has thus become the lynch pin for the Baloch hatred of Punjabi elite.
Gwadar had a population of about 5000 in 2001, mainly comprising of poor fishermen, once the Chinese assisted deep water port development began, it has crossed a population of 125000. Apart from a network of roads, rail air and infrastructural projects, Pakistan plans include a liquid natural gas (LNG) terminal, an international airport, a cement plant, an oil refinery, and a steel mill. China’s interests at Gwadar are very clear; China is looking for monitoring of its Gulf oil supply route as well as an opening for import/ export trade from its Muslim majority Xinjiang Autonomous Region.
The first phase of Gwadar port was completed on schedule by the Chinese in 2005. The running of the port has been leased for 40 years to PSA International of Singapore in 2007 by the Pakistani government. The agreement has however run into problem with Pakistan blaming PSA of not keeping their end of contract with respect to the investments promised by them. With Gwadar port commencing operations it has given the Chinese an opening in to the Arabian Sea, a strategic depth to Pakistan navy and some cause for worry to India. In 2008 the then Chief of Naval Staff, Indian Navy Admiral Sureesh Mehta said Gwadar could be used by Pakistan to “take control over the world energy jugular.”With this backdrop, the impact of Gwadar Port for the Chinese would be discussed in some detail in the succeeding paragraphs.
Slackening of the SLOC Noose at Malacca for China
As per some estimates China’s maritime industries could contribute up to $1trillion by 2020. Chinese investments in Latin America and Africa are not only in energy sectors but span white goods, automobile parts and textiles amongst others, but the linkage with China is through the sea lanes. This coupled with inbound humungous requirements of oil from gulf and African countries has given rise to the Chinese fears about disruption of its imports and exports through choking of SLOCs due to state , non state or natural factors. This has led to a rethink in the traditional maritime strategy of China, as per Ni Lexiong, “the ultimate drive to develop sea power is over sea trade”.The increase in sea trade implies its inherent protection by reducing vulnerabilities in the SLOCs of interest to China.
Malacca Dilemma thus may not explicitly refer to the very narrow Malacca Straits per se but relate to the vulnerabilities of the complete maritime transit hawsers from Gulf/African coast, through Arabian Sea and Indian Ocean right up to the point where the energy is shipped inland to China including the reverse routes where goods are shipped out of China to markets up to Latin America. As for Malacca Straits, 50% of the Shipping originating from the African Coast and the Gulf, crossing this choke point, carries energy and goods pertaining to China. Thus Malacca constitutes the biggest threat to a growing China’s economy. In light of the above it can be appreciated that maritime economic security has become the main pillar of China’s maritime strategy.
Maritime economic security implies decreasing SLOC susceptibilities to disruption by developing alternate energy routes which tend to minimise SLOC transits, developing beneficial relations with countries in IOR and building a capable navy to counter piracy, terrorism and if required tackle interdiction by hostile navies in the region. China has been progressing strategically along these lines, by building port facilities, enhancing bilateral initiatives and upgrading its naval capabilities. However, as far as existing capabilities of PLAN are concerned, as per Pentagon’s 2007 report to the U.S. Congress, “China can neither protect its foreign energy supplies nor the routes on which they travel, including the Straits of Malacca.” 
Oil tankers from Gulf transit about 6000 nm and those from the African coast transit about 10,000 nm before they discharge their energy cargo at Chinese ports. Both the tankers routes have to pass through Malacca Straits in addition to problem zones in their respective routes. If tankers can unload at Gwadar, they would have to travel only about 680 nm from the Gulf and about 3000 nm from African coast (Angola).
The contribution of Gwadar port to reduction in Chinese SLOC vulnerabilities needs to be assessed under the above premises. Pak-China pipe line from Gwadar to Kashghar in Xinjiang, is likely to run parallel to the Karakorum highway and cover a distance of about 1500 miles over tough mountainous terrain. Indicators that China is seriously contemplating Pak-China energy corridor are evident from the following development projects:-
-Phase II of Gwadar port and International Airport at Gwadar by China Harbour Engineering Company.
-Petrochemical city (including oil refining capacity of 421,000 bpd) by Great United Petroleum Holdings Company Limited.
-Rail link up to Xingjiang by Dong Fang Electric Supply Corp.
-Upgrading of Karakoram high way.
-Construction of Kazakhstan-China and Turkmenistan – China pipe lines and their eventual augmentation by feed from Gwadar-Kashghar pipe line.
If this project at Gwadar fructifies on expected lines it is estimated that it would account for about 8% of the 2020 Chinese oil import requirements.The impact on outbound trade from China to Africa and Latin America would be phenomenal. This, coupled with China-Myanmar pipe line from Kunming to Kyaukphyu (Myanmar) and associated infrastructure of port development, road, rail, refinery etc. which are under construction, would definitely reduce the critical dependence on Malacca Straits. In addition it would allow movements of Chinese goods bound for Indian Ocean region without having to transit Malacca Straits. Currently both the ports do not show any signs of building of Chinese Naval bases, and are only gearing up for supporting Chinese and regional maritime economy ‘thus in effect loosening the SLOC noose at Malacca for China’ rather than tightening of string of pearls for India.
However, considering the prohibitive time and cost investments in developing individual strategies to deal with vulnerabilities at sea it would be worthwhile for all stake holders, especially China and India, to work out a co-operative strategy to ensure a peaceful, growth oriented, piracy and terrorism free, transit in the Indian Ocean. A welcome step was taken by India and China at Rio+20 conference on 20 Jun 2012 to ensure that bilateral trade reaches $100bn by 2015.
 Robert D. Kaplan, Pakistan’s Fatal Shore, The Atlantic ,May 2009 http://www.theatlantic.com/magazine/archive/2009/05/pakistan-8217-s-fatal-shore/7385/
 Bulent Gokay, “ Caspian Uncertainties: Regional Rivalries and Pipelines” Journal of International Affairs, Ankara, Volume,3,No,1,1998,p.49
 Alam Shah. Pipeline Politics in the Caspian Basin. Strat Analysis, January-March 2002.p8
 Shah Alam, “Pipeline Politics in the Caspian Basin” Strategic Analysis, January-March 2002,
 Ziad Haider, “Balochis, Beijing, and Pakistan’s Gwadar Port,” Georgetown Journal of International Affairs, 2005, 95-112, 95
 Robert D. Kaplan, Pakistan’s Fatal Shore, The Atlantic ,May 2009 http://www.theatlantic.com/magazine/archive/2009/05/pakistan-8217-s-fatal-shore/7385/
 Saleem Shahid, “Gwadar Project Launched: Musharraf Lauds China’s Assistance,” Dawn, March 23, 2002.
 Nirupama Subramanian, “Musharraf cites Bhinranwale’s killing,” The Hindu, October 12, 2006.
 Abdus Sattar Ghazali, “India Alarmed as Chinese Built Gwadar Port of Pakistan Becomes Operational,” Countercurrents.org, February 8, 2008
 Ni Lexiong: Sea Power and China’s Development, the Liberation Daily, 17, April, 2005
 “Annual Report to Congress, Military Power of the People’s Republic of China 2007,”(Washington, DC: Office of the Secretary of Defense, 2007)
 Corey S. Johnston, Transnational Pipelines And Naval Expansion: Examining China’s Oil Insecurities In The Indian Ocean, Naval Postgraduate School, Monterey, CA, June 2008.