Turkmenistan's southeastern desert, not far from the border with Afghanistan, is a forbidding place. Its bleak, dusty vistas are punctuated by the ruins of ancient caravansaries: once rest stops on the old Silk Road. But, the silence of that long lost East-West artery is now regularly broken by the rumble of Chinese truck convoys. These are not ordinary tractor-trailers, either: they move slowly carrying massive loads of natural gas extraction equipment, and according to Turkmen officials, the shepherds' bridges and village roads have had to be reinforced from the impact of their weight. The equipment is headed to one of the top five natural gas fields in the world; Formerly known as South Yolotan-Osman, in 2011 the field was renamed "Galkynysh" or "revival" in Turkmen. The name is apt because this gargantuan reserve of natural gas is the prize motivating CNPC, China's largest oil company, to revive the old Silk Road -- only this time by pipeline.
Silk Road scholars often point out that there was never one route from China to Europe through Central Asia. The old Silk Road was, instead, a network of interlinking corridors that formed a spider web of connections across Eurasia. CNPC 's energy strategy for Central Asia roughly traces this route. It is anchored by a main artery -- the Central Asia-China gas pipeline -- that runs all the way from China's east coast cities to Galkynysh: a distance of more than 6,000 miles. But before that was even finished, CNPC began building spurs from that main line not only to the major energy producers of Turkmenistan, Kazakhstan and Uzbekistan, but also to energy-poor Kyrgyzstan, Tajikistan and Afghanistan. CNPC plans not just to source gas from Turkmenistan to China, but also to distribute Turkmen gas to other countries in the region. By Chinese standards the volumes are small, but they provide important geopolitical leverage for CNPC and the Chinese government.
Strategically speaking, CNPC has taken a page from Gazprom's playbook. Russia's state-controlled energy monopoly once extended its stranglehold to Moscow's former colonies in Central Asia. Up until five years ago, Kazakhstan, Turkmenistan and Uzbekistan were largely dependent on Gazprom-controlled Soviet-era pipelines for the export of their gas through Russia and on to Europe, forced to submit to Russia's hefty price markup and prices, terms and gas flows. It was this domination that prompted cautious, avowedly neutral Turkmenistan to invite CNPC not only to build a major pipeline on its territory, but to have exclusive and sole rights to natural gas production sharing onshore in the country.
The shift is being felt region-wide. According to a credible source, CNPC representatives recently told their Gazprom counterparts in Ashgabat, Turkmenistan's capital, that Central Asia was China's turf when it comes to energy. Distributing resources throughout the region, to both energy poor countries and also parts of Kazakhstan and Uzbekistan that require gas, gives CNPC the sort of guiding hand that Russia once enjoyed. The major difference is that while Central Asian states could diversify away from Russia by developing relationships with China, now they have few other options, particularly as the United States and Western forces withdrawal combat troops from Afghanistan in 2014.
Strategically speaking, CNPC has taken a page from Gazprom's playbook.
Premier Hu Jintao set CNPC's plans in motion in 2003 when he visited Kazakhstan to secure Astana's cooperation for what was dubbed at the time the "Pan Asian Global Energy Bridge", with explicit plans for connections through central and western China, Central Asia and Iran all the way to the Persian Gulf. At the time, the Galkynysh gas field's riches had not been confirmed and Turkmenistan was mainly viewed by CNPC as an addition or a thoroughfare. But, when Gaffney Cline, a respected British energy auditing firm, announced that Turkmenistan's southeastern gas fields gave the country the world's fourth largest reserves, CNPC doubled down on its plans to make the small desert country the spoke at the center of its regional wheel of energy infrastructure. The Central Asia-China gas pipeline was duly built in 18 months, the fastest built pipeline of its size in history. Gas started flowing in 2009 and capacity is set to more than double to a massive 60 billion cubic meters a year by 2015.
The plans are ambitious. By that time, the project is expected to have up to four "strings", or individual pipes, with different routes traversing Turkmenistan, Kazakhstan, Uzbekistan, northern Afghanistan and Tajikistan, spurs in Kazakhstan, Uzbekistan and Kyrgyzstan, and a "trans-Turkmen" connection to the Caspian Sea, where it is rumored that CNPC or other Chinese state-owned enterprises are contemplating offshore extraction. These are the resources that have, for almost two decades, been mooted as part of the so-called Southern Gas Corridor to Europe. But while Western energy companies and governments dithered over the scope and political niceties of the Nabucco, Trans-Adriatic and Trans-Caspian pipelines, as well as their many competing projects, CNPC and Chinese diplomats in Central Asia rammed their project through and now sit in the proverbial catbird seat of Eurasian energy geopolitics.
As CNPC's major gas artery snakes southwest, its main oil path winds northwest to Kazakhstan's many oil wells. While Western companies spend decades and tens of billions of dollars trying to get offshore mega-projects online in Kazakhstan's portion of the Caspian Sea, Chinese state-owned enterprises have artfully snapped up production rights for already established Soviet-era fields, upgrading them just enough to ensure that the oil flows eastward. They have also taken advantage of Kazakhstan's relatively open investment climate to buy into subsidiaries of KazMunaiGas, Kazakhstan's state-controlled energy company, or buy some of the country's energy concerns, such as Aktobemunaigaz, outright. CNPC now controls more of Kazakhstan's oil output than any single Western company.
The Kazakhstan-China oil pipeline, a staggering, rapidly realized endeavor in operation since 2006, connects refineries in Xinjiang to Kazakhstan's northwest: the country's traditional oil producing region. Its transit volumes have increased by 20 percent a year since its inauguration, and in April, CNPC announced plans for further expansion of the pipeline once it reaches capacity next year. CNPC and KazMunaiGas are in the midst of negotiations for an expanded natural gas network within Kazakhstan that will connect to the major China-Central Asia artery from Galkynysh and its main spur into Kazakhstan.
However, CNPC's most notable oil extraction projects in the region are those in Afghanistan's northern Sar-e-Pul province. While output is tiny compared to that of CNPC's operations in Kazakhstan, the Kashkari, Bazarkhami and Zamarudsa blocks are the first to pump oil since the U.S.-led intervention in 2001. The crude is currently being trucked in convoys across the border to Turkmenistan to be refined, but if CNPC plans go forward, the north of Afghanistan will soon be integrated into China's Eurasian energy network via a string of the Central Asia-China gas pipeline, as well as a possible CNPC refinery on Afghan territory. The Chinese giant seems to have bet on northern Afghanistan for the long haul, arranging for security relationships with local militias and reportedly doling out cash to key regional authorities. As the United States loses interest in Afghanistan, China is positioned to capitalize.
Zooming out to include Central Asia as a whole, China's growing involvement in the region's energy scene is even more striking. In just a few years, CNPC has displaced Gazprom as the region's energy hegemon, extracted gas and oil from countries like Turkmenistan and Afghanistan where Western companies have had no luck, and is in the midst of interlinking an extraction, pipeline and refinery network the likes of which the energy industry has never seen. All of this is just to provide a fraction of the 5 percent of China's energy consumption that comes from natural gas. Given Beijing's stated commitment to exponentially increasing gas consumption in the next five years, China's Eurasia energy network can only expand.
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