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Securing China’s Energy: Belt and Road Initiative - Erkin Sancarbaba


The Belt and Road Initiative is a massive infrastructure and reconstruction plan, which is mainly underpinned and financed by China. Since it was introduced in 2013, although its opposers argue that the program is the economic and political influence tool of China, 140 countries from various continents have joined this comprehensive program. The Initiative foresees 1.3 trillion dollars of investment that includes ports, railways, airports, roads, telecommunication facilities, and evidently, energy infrastructure. The efforts to establish economic development corridors in favor of the Chinese-led investments are closely linked with the aim of ensuring China's energy security.


As the world's largest energy consumer, China's dependency on external energy sources limits the country's political and economic maneuverability. Given this situation, under the auspices of the Xi Jinping administration, China makes an effort to diversify its resources and energy production methods. Today, China is taking a leading part in nuclear and renewable energy investments. On the other hand, China's adherence to crude oil and natural gas resources keeps the concerns about the country's energy import dependence on the agenda of the Chinese government.


Furthermore, despite its huge investments in nuclear and renewable energy, China still supplies nearly 75% of its energy requirements with fossil fuels. Nearly 70 percent of the crude oil consumptions and 45 percent of the natural gas consumptions of the country are supplied from foreign sources. When the instability risk in the regions having a vital part on the energy provision added to the aforementioned situation, the increasing concerns of the Chinese government about the persistence of the country's energy security becomes much more explicable. Additionally, the ratios stated above exhibits that China's large-scale energy investments, which have been constructed and financed within the scope of the Belt and Road Initiative, are not only the results of economic concerns. The approach of the Chinese government to energy investments aims to eliminate threats to national security by keeping energy transmission stable.


There are two key projects, which aim to transmit Russian gas to China. Both Power of Siberia Gas Pipeline and Altai Gas Pipeline projects are financed as part of the Belt and Road Initiative.


Power of Siberia Gas Pipeline is an existing project that has an export capacity of 38 billion cubic meters per year. The total cost of the project is between 55 and 70 billion US dollars. In May 2014, Gazprom and China National Petroleum Corporation (CNPC) signed the 30-year Sales and Purchase Agreement, which is worths nearly 400 billion dollars. The agreement estimates the transmission of Russian natural gas to China. By the natural gas pipeline that became active in 2019, China targets to diversify its natural gas sources and decrease its dependency on coal.


The Altai Gas Pipeline (also known as Power of Siberia-2) is a natural gas transmission line that is in the project phase. The pipeline project has the potential of enhancement of global competitiveness among major LNG exporters such as Australia, Qatar, and the United States on access to the Chinese market. Moreover, Turkmenistan, Uzbekistan, and Kazakhstan go for in selling more gas to China. All these developments strengthen China's hand on reaching cheaper natural gas. Indeed, both Power of Siberia and Altai Gas Pipeline projects are quite strong tools of the Chinese government on the coal-to-gas transition policy.


Chinese-led energy transmission investments within the Belt and Road Inıtiative focus on the Central Asia region as well. The fourth phase (Line D) of the Central Asia – China Gas Pipeline, which will increase the annual capacity of the Central Asia – China Gas Pipeline to 85 billion cubic meters, is under construction. The fourth phase of the project, which will be operated by China National Petroleum Corporation (CNPC), will ensure the transmission of the Turkmen gas to China through Uzbekistan, Tajikistan, and Kyrgyzstan. In this current situation, with the existing gas supply infrastructure, China is almost the only buyer of Turkmen gas. After becoming operational, Line D will approximately double the capacity of Turkmenistan's gas exports to China. By means of this, China will gain the advantage of dominancy over Turkmen gas resources.


Also in 2009, China and Myanmar signed agreements to construct $1.04 billion cost natural gas and $1.5 billion cost oil pipelines. The natural gas pipeline, which has an annual capacity of transmitting 12 billion cubic meters of gas to China, is supplied from Shwe Gas Field. It became operational on July 28, 2013. The Myanmar – China Crude Oil Pipeline that has an annual capacity of 22 million tons, became active on April 10, 2017. The oil pipeline has a strategic target of lessening China's dependency on Malacca Strait at oil shipping activities. Through this step, in addition to cutting shipping times, China aims to transmit oil from much safer areas. Besides, the increasing cooperation between the two countries has the potential of reducing China's energy dependency on the Middle East region.


In conclusion, alongside the other infrastructure investments taking place within the scope of the program, energy transmission lines, which are built and still on construction in progress as part of the Belt and Road Initiative, have strategic values of diversifying China's energy sources and guarantee the country's energy security. In the world's current state, while other countries are looking for an effective energy governance strategy, the policy that China implements might be a demonstration of the necessity of approaching energy security within the context of national security interests. The policy of maximizing alternatives on energy supply, which is executed by China, may increase the policy options of other countries as well. Accordingly, China's cooperation with its neighbors on energy transmission ought to be monitored closely. Thus, this win-win policy can be claimed as an example of efforts to ensure energy security.

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