Gwadar: An Emerging Centre of The New Great Game: Syed Fazl-e-Haider

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Syed Fazl-e-Haider

Gwadar:
An Emerging Centre of the New Great Game
Historically Gwadar, a fishing
village along the Balochistan
coast, has been one of the
main routes of communication
between the Middle East and
India. Situated on the mouth of
the Gulf of Oman, Gwadar
remained a part of the Omani
Sultanate
until
September
1958. The then Prime Minister
of Pakistan, Feroz Khan Noon,
realizing the geographic and
strategic importance of the
area,
purchased
it
in
September 1958, when Sultan
Said Bin Taimur allowed it to be
integrated into Pakistan in
return for a payment of 3 million
pounds sterling. In 1992 the
Nawaz
Sharif
government
decided to build a deep sea
port at Gwadar, and its
construction accelerated under
Musharraf.
The upgrading of the deep-sea
port and future plans for
important oil pipelines traversing
Baluchistan will enhance the
strategic value of Pakistan:
Gwadar, once completed, will
attract new investment, bolster
the countrys strategic defensives,
and serve as an energy corridor
for Central Asia, South Asia and
western China, earning Islamabad significant profits in transit
fees. The quest for energy
security
and
geostrategic
imperatives has also attracted
the attention of China, India,
the USA and Russia, all part of
the new great game focused
around Gwadar.

Chinas Role
It is the Chinese connection
with Gwadar that has attracted
most attention from regional
security observers. China has
transparent interests in monitoring
the supply routes for its rapidly
increasing energy shipments
from the Persian Gulf and in
opening an alternative route via
Pakistan for import/export trade
serving Chinas vast, restive,
and rapidly developing Muslimmajority Xinjiang Autonomous
Region. Gwadar has become
Chinas most favorable choice
for oil trade, as the present
choke point of oil trade at
Hormuz is becoming congested.
About 80 per cent of Chinas oil
imports flow through the narrow
Strait of Malacca, which is
considered as unsafe route and
is
notorious
for
piracy.
Gwadars location opposite to
the Straits of Hormuz provides
China an alternative to the
Strait of Malacca Chinas
eastern seaboard ports are
3,500 kilometers away from
Kashgar, western Chinas main
city, whereas the distance from
Kashgar to the Pakistani
coastal town of Gwadar is only
1,500 kilometers. Proximity of
Xinjiang to Gwadar also makes
it feasible and cost-effective for
China to carry out trade through
this port which is close to the
Gulf, Central Asia, Europe and
Africa. Given this fact, there is
an
obvious
huge
cost
advantage for China to use
Gwadar as the gateway port for
its western region.

N. 162 - OCTOBER 2009

Abstract
The port of Gwadar, in southern
Balochistan, is expected to
become the terminus of three
proposed gas pipelines reaching
either from Daulatabads fields in
Turkmenistan, South Pars fields in
Iran or from Qatar.
The control of these oil and gas
reserves is at the centre of a new
great game, which is
complicated by the Chinese
presence in Gwadar, near the
Strait of Hormuz, Americas
military presence in the Af-Pak
region, and ethnic unrest in
Balochistan.

Syed Fazl-e-Haider (www.syedfazle


haider.com) is a development analyst
based in Pakistan. He is the author of
The Economic Development of
Balochistan (Karachi 2004) and has
recently written Gwadar: An emerging
Gateway Port for Central and West Asia.
Any publishing group interested in this
book project may contact the author by email (fazlehaider@hotmail.com).

It is therefore not surprising that


China has been so far the main
investor in Gwadar port. The
two-phase program of port
construction is being supervised
by Tianjin Zhongbei Harbour
Engineering Supervision Corporation of China (TZHESC). The
total cost of the project is
estimated at US$1.6 billion, and
China has so far contributed
about US$198 million. The first
phase was completed by the
China
Harbor
Engineering
Company (CHEC) in 2005. The
CHEC is also involved in the
construction of an international
airport at Gwadar at a cost of
US$70 million. The US$12.5
billion petrochemical city project
at Gwadar is also being
undertaken by Great United
Petroleum Holdings Company
Limited (GUPC) of China.
China-funded oil refinery will
have a total capacity to refine
21 million tons of oil per annum.
The petroleum products thus
refined may be transported to
Kashghar through a pipeline.

Other Key Players


The US is worried about the
rapidly growing might and
influence of China in Asia. The
Pentagon fears in particular
that China could monitor US
naval activities in the Persian
Gulf and possibly turn Gwadar
into a naval base, thus
threatening the Arabian Sea
and the Indian Ocean. The
development of Gwadar also
fuels the suspicion that the US
has long felt towards ChinesePakistani
relationship.
To
Washington, controlling Gwadar
has implications for the war on
terror, as it would open the
opportunity of a long land route
across Balochistan into southwest
Afghanistan. From a Pentagon/
NATO perspective, after the
loss of the Khyber Pass in
North western Pakistan, where

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NATO trucks have been


increasingly
attacked
by
insurgents, that would be the
ideal supply route for Western
troops in Afghanistan1.
New Delhi sees the Arabian
Sea port of Gwadar as a
Chinese naval base, which is
likely to develop into a nuclear
submarine or aircraft carrier
homeport with the passage of
time. Independent observers
also believe that the Chinese
presence in Gwadar would
frustrate Indias domination of
regional waterways and benefit
Pakistan; feeding into these
fears, Indian naval chief
Admiral Suresh Mehta said in
January 2008 that the Gwadar
port would empower Pakistan
to control strategically important
energy sea-lanes in the Persian
Gulf. Geographically, India
controls no choke point on the
coastline of the sub-continent
through which international
shipping must pass. In addition,
the quest for energy security
has turned China and India,
which is rated as the worlds
number six energy consumer,
into competitors in the global
energy game. While the
Chinese
are
developing
Gwadar, India is engaged in
developing Chahbahar port in
Iran and road links from Iran to
Afghanistan, thus obtaining
access to the landlocked
countries of Central Asia and
bypassing
the
Pakistani
territory.

The Iran-Pakistan
Gas Pipeline Deal
The proposal of laying a gas
pipelines from the Daulatabad
fields in Turkmenistan or South
1

P. ESCOBAR, Balochistan is the


ultimate prize, in Asia Times, 9
May 2009, http://www.atimes.com/
atimes/South_Asia/KE09Df03.html.

Pars fields in Iran to Gwadar


has triggered a cold war
between pro-project and antiproject actors in the regional
geopolitics. It is worth noting
that the US opposes the IPI
(Iran-Pakistan-India) pipeline,
also known the as the peace
pipeline, but supports the TAPI
(Turkmenistan-Afghanistan-Pakistan-India) pipeline project.
India has recently withdrawn
from IPI, calling it a risky
venture and expressing in
particular its concern over the
security for the pipeline, which
has to run across volatile areas
in Balochistan where other
pipelines have been attacked in
the past by nationalist insurgents
demanding greater political and
economic autonomy. Pakistan,
however, is going ahead with
the
project
despite
US
displeasure and Indian lack of
interest. On May 23 2009
Pakistani President Asif Ali
Zardari and his Iranian counterpart Mahmoud Ahmadinejad
signed
a
US$7.5
billion
agreement in Tehran finalizing
the deal to transfer gas from
Iran to Pakistan. Under the
deal, Iran will initially transfer
30 million cubic meters of gas
per day to Pakistan, but will
eventually increase the transfer
to 60 million cubic meters per
day.
In
August,
Richard
Holbrooke, the US Presidents
Special envoy for AF-Pak
region, has pledged for an allout support to Pakistan in
ensuring its energy security.
Critics say that US involvement
in resolving the countrys
energy crisis is an attempt to
foil the Iran-Pakistan gas
pipeline project. As the US is
opposed to project, it might be
trying to lure Pakistan away
from it by offering help to
overcome its acute energy
shortage. Holbrooke however
denied these allegations and
said that he had not discussed

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the project with any of the


officials in Islamabad.
At to Russia, it supports the IPI
gas pipeline and Gazprom is
keen to participate in its
construction. Moscow sees it as
a means to divert Iranian gas
from competing with Russian
exports on the European
market. Russian exports satisfy
over one quarter of Europes
gas needs, but the European
Union is hoping to lessen its
dependence on Moscow with
the construction of the Nabucco
pipeline, which would pump
Caspian Sea gas to Europe
and bypass Russia. The IranPakistan pipeline could deprive
the Nabucco project of one
possible
source
for
gas
supplies.

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