A portion of the natural gas pipeline that runs from Central Asia to China. Photo: Getty Images
A portion of the natural gas pipeline that runs from Central Asia to China. Photo: Getty Images

Several counties in the Beijing conurbation as well as in neighboring provinces have once again been shrouded in fumes resulting from the burning of coal as people have been forced to switch back from natural gas, which is in short supply, to the heavily polluting fossil fuel during the frigid winter.

Beijing has blamed hoarding on the part of LNG (liquified natural gas) exporters in Central Asia, particularly Turkmenistan and Uzbekistan, for the shortfall.

Beijing-based strategic think-tank Anbound noted in a report that the sharp drop in gas shipments through a key Central Asian pipeline network had put China’s already-tight domestic LNG supply to the test.

Increases in domestic demand in supplier countries and the withholding of LNG to push up prices are two reasons for the problem, as suppliers evidently have no scruples against breaking the terms of their contracts with China.

The state-owned China National Petroleum Corporation admitted at the end of last month that there was indeed a supply crunch and that it could get worse.

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The Central Asia-China natural gas pipeline (red). Source: Stratfor.com

The volume of LNG from Central Asia had fallen by nearly half in the fourth quarter of last year compared with a year earlier, domestic news portal Jiemian.com reported. Sources at China’s three major state-owned oil and energy companies say supplier nations have been making excuses such as inadequate funding for maintenance and pipeline leakage for the dwindling supply. Altogether, Central Asian suppliers have been sending in 30 million cubic meters of gas per day less than the contracted volumes.

It is suspected that Central Asian suppliers have been enticed by the fatter markup for gas sales to Europe.

The China-Central Asia LNG pipeline, which starts at the border between Turkmenistan and Uzbekistan on the banks of the Amu Darya River, is one of the world’s longest. The gas pipeline runs about 10,000 kilometers, with 188km in Turkmenistan, 530km in Uzbekistan, 1,300km in Kazakhstan and 8,000km in China.

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A 2013 file photo shows Chinese President Xi Jinping (left) and his Turkmen counterpart Gurbanguly Berdimuhamedov pressing ‘start buttons’ to launch the world’s second-largest natural-gas field. Photo: Xinhua

As China adjusts its energy-consumption structure by switching to green energy, the demand for LNG will constantly grow and create a heavy dependency on foreign resources. The high dependency on LNG from Turkmenistan in particular has become a potential security risk.

There have been another theory to explain the supply cut, from a geopolitical point of view. Some believe that China’s “fortification” of the tumultuous Xinjiang Uygur Autonomous Region with stepped-up border militarization and patrols has made Central Asian nations antsy, even though Turkmenistan and Uzbekistan do not share borders with China.

Previous reports by overseas media have revealed that Beijing had dispatched regiments of People’s Liberation Army troops in the guise of technicians and maintenance staff to Turkmenistan, Uzbekistan and Tajikistan and conducted surveillance along the LNG pipelines.

The PLA Daily also reported last year that soldiers entered places they had never entered before in Xinjiang’s border areas for surveillance and camouflage training.

Turkmenistan’s and Uzbekistan’s gas-supply contracts have also been attacked by opposition politicians as unjust treaties allowing China to browbeat its neighbors and exploit natural resources in Central Asia. Co-development of gas fields with Chinese funds and technicians in those countries have also been met with resistance from local stakeholders.