Corridor Calculus

Corridor Calculus : China Pakistan Economic Corridor & China's Comprador Investment Model in Pakistan
As for transport costs, they have calculated that moving oil by ship costs on
an average just about $0.90 per barrel, but if oil is first shipped to Gwadar
and then moved by train to China, it will cost anything between $8 to $12.4
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per barrel. Even if there was a pipeline linking Gwadar to China, it would
raise the transport costs considerably. In another paper, both the American
scholars have calculated that it would cost around $10 per barrel to ship oil
through pipeline to Urumqi and then an additional $5 per barrel to the
Chinese heartland in the east. This means that compared to around $2 to
ship oil by sea, it would cost China around $15 to ship oil by pipeline through
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Gwadar. Even the time advantage that is often touted as justifying
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overland transportation doesn't really end up being economical.
As far as gas imports are concerned, China only imports about 30% of its
demand; for instance, in 2013, it imported 1.8 trillion cubic feet (Tcf) out of a
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total demand of around 5.7 Tcf. More importantly, only around 30% of the
imports come through the Straits of Malacca. In 2014, China was already
importing 1.1 Tcf by pipelines from Central Asia and Russia. The Central
Asian Gas Pipeline (CAGP) has three parallel pipelines running from
Turkmenistan, Uzbekistan and Kazakhstan with a capacity of transporting
1.9 Tcf per annum by the end of 2015. An additional 880 billion cubic feet
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(Bcf) per annum will be added to the CAGP capacity by 2016. The
Myanmar gas pipeline has a capacity of 420 Bcf/y and add to this the Russia-
China gas pipeline deals and it's quite clear that China doesn't need to build
an expensive and technologically extremely challenging, even unviable,
pipeline over Khunjerab pass to transport gas. Add to this China's LNG
capacity on its east coast, and it makes the case for a pipeline through
Pakistan a bit of a pipedream.
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Gabe Collins and Andrew Erickson, 'Still a pipedream: A Pakistan-to-China rail corridor is not a substitute for maritime
transport', China Signpost 22/12/2010, accessed at http://www.chinasignpost.com/2010/12/22/still-a-pipedream-a-pakistanto-china-rail-corridor-is-not-a-substitute-for-maritime-transport/
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Andrew S. Erickson and Gabriel B. Collins, 'China's oil security pipe dream: The reality and strategic consequences of
seaborne imports', Naval War College Review, Spring 2010, Vol. 63, No. 2, pp 104, accessed at
http://www.andrewerickson.com/wp-content/uploads/2010/03/China-Pipeline-Sealane_NWCR_2010-Spring.pdf
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Vivan Sharan & Nicole Thiher, 'Oil supply routes in the Asia Pacific: China's strategic calculations', ORF Occasional Paper #24,
September 2011
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Op. cit. (EIA report 2015 pp 15)
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Op. cit. (EIA report 2015 pp 21-22)
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