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Exclusive: China in $5 billion drive to develop disputed East China Sea gas

By Chen Aizhu

BEIJING | Wed Jul 17, 2013 4:13am EDT
(Reuters) - Chinese state-run oil companies hope to develop seven new gas fields in the East China Sea, possibly siphoning gas from the seabed beneath waters claimed by Japan, a move that could further inflame tensions with Tokyo over the disputed area.

Beijing had slowed exploration in the energy-rich East China Sea, one of Asia's biggest security risks due to competing territorial claims, but is now rapidly expanding its hunt for gas, a cheaper and cleaner energy to coal and oil imports.

State-run Chinese oil and gas firm CNOOC Ltd will soon submit for state approval a plan to develop Huangyan phase II and Pingbei, totaling seven new fields, two industry officials with direct knowledge of the projects told Reuters.

The approval would bring the total number of fields in what is called the Huangyan project to nine.

China is already working on Huangyan I which has two fields approved. The Huangyan project is expected to cost more than 30 billion yuan ($4.9 billion), including 11 production platforms now under construction at Chinese shipyards.

If approved, the seven new gas fields would not see a big jump in China's total gas output, supplying only a fraction of last year's 106 billion cubic meters (bcm) and dwarfed by operations in the disputed South China Sea and Bohai Bay off north China. Chinese geologists said gas deposits in the East China Sea region were much smaller and more scattered.

The greater issue is the political risk if Beijing approves the new gas fields. Tensions over the East China Sea have escalated this year, with Beijing and Tokyo scrambling fighter jets and ordering patrol ships to shadow each other, raising the fear that a miscalculation could lead to a broader clash.

"It's a sign of impatience on the side of the Chinese, stemming from a lack of movement on the Japanese side on the gas fields issue," said Koichi Nakano, associate professor of political science at Sophia University in Tokyo.

China and Japan in 2008 agreed to jointly develop hydrocarbons in the area, but Tokyo wishes to settle the issue of maritime boundaries before developing the gas fields.

"The question is what will be Japan's response and whether they would be able to talk China out of a unilateral move," said Nakano. "But escalation of tensions leading to a war? I don't think so. The Americans will be watching this situation with grave concern and may play a role of a mediator here."

A spokesman for Japanese Prime Minister Shinzo Abe said: "Our understanding is that Japan and China should continue to have dialogue on the issue of joint exploitation of this area, so any unilateral action should not be accepted".

Even if the National Development Reform Commission gives approval for the new gas fields, the pace of the development could be determined by China's Foreign Ministry which requests oil companies to seek its approval before every drilling. Such permission may be influenced by tensions with Japan at the time.

MAJOR EAST CHINA SEA EXPANSION

China and Japan disagree on where the maritime boundary between them lies in the East China Sea. Beijing says its activities are in the Chinese territories, while Tokyo is worried the Chinese drilling near the disputed median line would tap into geological structures in its waters.

Japan lodged a protest early this month after detecting well construction works at Huangyan I about 26 kms (16 miles) west of the disputed median line. China's foreign ministry rejected the protest as a baseless, saying Beijing had the right to drill in its sovereign waters.

U.S. Energy Information Administration estimated in 2012 that the East China Sea has between 1 and 2 trillion cubic feet (28-57 bcm) of proven and probable natural gas reserves, a modest gauge versus estimates by Chinese sources at up to 250 tcf in undiscovered gas resource.

If approved, the new gas fields would supply China's manufacturing hub of Zhejiang province, about 400 km (249 miles) away on the east coast, with production slated to start in the fourth quarter of 2015, said the officials.

The fields would have a combined annual production capacity of nearly 4 bcm, up from the region's current output of less than 1 bcm, and would account for about 2 percent of China's estimated gas output by the end of 2016.

CNOOC and partner Sinopec Corp are already developing Huangyan I, which was officially approved by the National Development & Reform Commission in June 2012 and is due to start producing gas in September next year. Also on the planning board is Pingbei II, expected to come on line in 2016.

CNOOC media officials declined to comment on the new developments and industry sources quoted for the story declined to be identified due to the sensitive nature of the topic.

CHINA FAST-TRACKING HUNT FOR GAS

China, the world's top energy user, is on a fast track to boost the use of natural gas, with demand for gas forecast to grow more than four fold by 2030 from the 147 bcm last year. China is the world's fourth biggest gas consumer.

China first started pumping gas in early 2006 from the Chunxiao field, part of the massive Xihu trough, but territorial disputes have hindered an industry keen to explore and develop the region, Chinese industry experts said.

"China has made compromise, having slowed down the works quite a few years," said a state oil official, "The cards are in the hands of Chinese, as companies are capable of developing (this area) after all the explorations done over the years."

China's plan to expand East China Sea operations comes after a near six-year lull in investment in the area, since the 2008 agreement to jointly develop hydrocarbons in the area.

"Since 2008 when the two nations reached a consensus for joint development, Japan has barely made any sincere diplomatic moves towards that direction...It seems that Japan wants to settle the boundaries first before moving to cooperations, which is totally unrealistic," said Liu Junhong, research fellow at China Institutes of Contemporary International Relations.

Under the proposed expansion plan, Huangyan II, which is adjacent to the disputed maritime border, would consist of two gas fields. Huangyan I has two fields.

Pingbei, an uncontested area located in the western side of the Xihu trough, would have three fields under phase I and another two under phase II.

(Additional reporting by Linda SiegAntoni Slodkowski and Yuka Obayashi in Tokyo; Editing by Michael Perry)
 
Abe rallies Ishigaki coast guard members over Senkaku Islands


THE ASAHI SHIMBUN
July 17, 2013

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In a move aimed at sending a warning to China over the Senkaku Islands, Prime Minister Shinzo Abe, as part of a stump tour for his Liberal Democratic Party, traveled to Okinawa Prefecture to meet with Japan Coast Guard members on Ishigakijima island.

The uninhabited islands in the East China Sea are under the jurisdiction of Ishigaki, a city in Okinawa Prefecture, but are also claimed by China.

Abe’s visit on July 17 was to encourage members of the Japan Coast Guard 11th Regional Headquarters' Ishigaki office, which is responsible for patrolling the waters around the Senkaku Islands.

Talking to some 40 members of the coast guard office, the prime minister said: "There have been provocative acts to Japan's territorial land, sea and airspace. With frequent approaches and the wandering of Chinese government vessels in surrounding waters, the security situation has become increasingly severe. I am determined to take the lead in protecting our territories."

In a speech in Ishigaki, Abe later said, "(The Senkaku Islands) are an integral part of Japan in terms of history and international laws. We have no intention of making a concession."

The prime minister had been enthusiastic about visiting Ishigaki, according to a source close to Abe who quoted him as saying, "I want to visit Ishigaki and encourage Japan Coast Guard members."

According to Ishigaki city officials, Abe's visit is the first to the city by an incumbent prime minister since the 1972 reversion of Okinawa to Japan.


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"The Japanese prime minister visiting Ishigakijima island and encouraging coast guard members would send a message to China," a senior official at the Foreign Ministry said before Abe's visit.

The act could show that Japan's stance on the Senkaku Islands will not change after the Upper House election on July 21. If the LDP and its coalition partner, New Komeito, capture a strong majority in the Upper House, there will not likely be a national election over the next three years.

A close aide to Abe said he feels strongly that "If China understands that the Abe administration will be in power for another three years, it will have to take a long-term approach toward Japan."

Another purpose of Abe's visit to Okinawa is to clearly show the administration's stance in supporting a plan to build a replacement for U.S. Marine Corps Air Station Futenma within Okinawa Prefecture, in the Henoko district in Nago.

Even though Abe did not mention Henoko in his speeches, his determination to relocate the U.S. base inside the prefecture was apparent.

"The prime minister's visit to Okinawa means the government will steadily proceed in accordance with a deal with the United States," a senior official of the administration said.

In the relocation issue, the local candidate running on the party ticket and the LDP's prefectural chapter are calling for Futenma to be replaced by another base outside the prefecture.

However, the administration believes the visit to Okinawa by the prime minister, whose party stipulated "relocation to Henoko" in its campaign promise, would make it a fait accompli.

The administration calculates that an LDP win in closely contested Okinawa, which has only one seat up for grabs on July 21, would influence Governor Hirokazu Nakaima, who is expected to make a decision on the reclamation of Henoko by the end of the year.

"Futenma is no longer an issue," said a source close to the prime minister. "Opposition parties opposed to the relocation of Futenma within the prefecture have failed to present alternative plans. The prime minister thinks the same way."

The prime minister also visited Miyakojima island, where an Air Self-Defense Force subbase is located, on the afternoon of July 17.
 
Chinese ships linger over a day near disputed isles

Four Chinese ships spent more than 24 hours in what Japan sees as its territorial waters, prompting a Japanese protest to China on Thursday at a time when Japan has been signaling its desire for a summit.

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Relations between the China and Japan have been strained for months, largely because of a dispute over a group of islands in the East China Sea know as Senkaku isles in Japan and Diaoyu islands in China.

Japanese Prime Minister Shinzo Abe is interested in improving the 2 countries relations and has called for dialogue with China, although he has rejected any conditions on talks.

Chinese ships have previously been in waters near the uninhabited East China Sea islands that are controlled by Japan but claimed by both countries, but they have usually left after several hours. However this time the 4 ships have spent over a day in the complicated area causing the Japan's chief cabinet secretary, Yoshihide Suga stated that " extremely regrettable and totally unacceptable behaviour".

He said Japan had summoned an envoy from the Chinese embassy early on Thursday to protest "strongly" and demand the ships immediately leave.

China's Foreign Ministry did not immediately respond to a request for comment.

However, the country's State Oceanic Administration said in a statement posted on Wednesday that four coastguard ships were conducting a patrol around the islands.

The ships had spotted Japanese ships "infringing China's sovereignty" and told them to leave, the Chinese agency said.

For months, aircraft and ships from both countries have played a cat-and-mouse game near the islands, known as the Senkaku in Japan and the Diaoyu in China, ratcheting up tension.

Japan's Vice Foreign Minister Akitaka Saiki met the Chinese foreign minister, Wang Yi, last week, though China has denied that talks on a possible summit are taking place.
 
BEIJING (Reuters) - China sees no reason to conduct talks with Japan over their dispute about ownership of a group of uninhabited islands in the East China Sea, Chinese deputy foreign minister Li Baodong said on Tuesday.

Li said Japan's call for high-level talks was not genuine, but merely grandstanding.

"A meeting between leaders is not simply for the sake of shaking hands and taking pictures, but to resolve problems," said Li, speaking to reporters ahead of President Xi Jinping's attendance at the G20 summit next week.

"If Japan wants to arrange a meeting to resolve problems, they should stop with the empty talk and doing stuff for show."

Relations between the world's second- and third-largest economies have been strained for months, largely because of the spat over the islands, known as the Senkaku in Japan and the Diaoyu in China.

Japanese Prime Minister Shinzo Abe is keen to improve relations and has called for high-level dialogue with China, although he has rejected any conditions on talks and China has shown no inclination to even want talks.

Moves by certain Japanese politicians to deny the country's wartime past also do not help, he added.

"Under these conditions, how can we organize the kind of leaders summit that Japan wants?" Li said.

China reacted with fury earlier this month after Japan's Abe sent an offering to a shrine for war dead, which also honors war criminals, while cabinet members visited it in person.

China suffered under Japanese rule, with parts of the country occupied from the 1930s. Japanese leaders have apologized in the past but many in China doubt the sincerity of the apologies, partly because of contradictory remarks by politicians.

"What Japan has to do now is show vision and courage, properly face up to history and take a proper attitude and real actions to get rid of the obstacles which exist for the healthy development of bilateral ties," Li said.


http://news.**********/china-sees-no-basis-talks-japan-over-islands-02170401
 
China must not go overboard in any conflict with Japan. Please.

Japanese civilians and particularly women and children did no wrong to China, Chinese people should understand this.
 
China must not go overboard in any conflict with Japan. Please.

Japanese civilians and particularly women and children did no wrong to China, Chinese people should understand this.

Japan is sitting on the ring of fire, the tectonic plates of ocean is slowly squeezing it and the vocano mountains will have Japan on slow cook...we Chinese don't need to do anything, the nature is already fight for our cause ;)

SAKURAJIMA VOLCANO ERUPTS IN JAPAN AUGUST 19, 2013 - YouTube

GLOBAL VOLCANISM: Japan's Mount Sakurajima Produces Explosive Plumes to Altitudes of 12,000 Feet! - YouTube
 
Japan is sitting on the ring of fire, the tectonic plates of ocean is slowly squeezing it and the vocano mountains will have Japan on slow cook...we Chinese don't need to do anything, the nature is already fight for our cause ;)

Don't be so stupid, you can easily absorb them. They are just like you.
 
Don't be so stupid, you can easily absorb them. They are just like you.

I have not hate for them, if fact I admire them for what they have done for their own country, it's just happend that I'm on the opposite side...by the way...since when you become a mongolian :lol:?
 
I have not hate for them, if fact I admire them for what they have done for their own country, it's just happend that I'm on the opposite side...by the way...since when you become a mongolian :lol:?

Just look at the flags, how colorful! I love them!
 
BEIJING (Reuters) - China sees no reason to conduct talks with Japan over their dispute about ownership of a group of uninhabited islands in the East China Sea, Chinese deputy foreign minister Li Baodong said on Tuesday.
Who can be surprised? While the Chinese signed the U.N. Law of Sea Convention, they added a note saying that it means, in effect, whatever the Communist Party says it means, and in 2006 declared that China would not abide by the Convention's dispute resolution procedures: link.

In effect, China wants all the moral benefits of being a signatory without any of the moral restraints and obligations. IMO, Chinese should become more aware of this. The Chinese Communists control the level of its maritime disputes to flame nationalism as needed to support the Party's control of the country.
 
Who can be surprised? While the Chinese signed the U.N. Law of Sea Convention, they added a note saying that it means, in effect, whatever the Communist Party says it means, and in 2006 declared that China would not abide by the Convention's dispute resolution procedures: link.

In effect, China wants all the moral benefits of being a signatory without any of the moral restraints and obligations. IMO, Chinese should become more aware of this. The Chinese Communists control the level of its maritime disputes to flame nationalism as needed to support the Party's control of the country.

Japanese have been cornered by the cunning Chinese again.

I wish the any conflict remains limited to the islands and adjacent seas.
 
Who can be surprised? While the Chinese signed the U.N. Law of Sea Convention, they added a note saying that it means, in effect, whatever the Communist Party says it means, and in 2006 declared that China would not abide by the Convention's dispute resolution procedures: link.

In effect, China wants all the moral benefits of being a signatory without any of the moral restraints and obligations. IMO, Chinese should become more aware of this. The Chinese Communists control the level of its maritime disputes to flame nationalism as needed to support the Party's control of the country.

We don't need anyone to inflame nationalism when racists like Shintaro Ishihara are elected by the Japanese people as their politicians.

somehow provocations from Japan, the Philippines and Vietnam are entirely ignored, the racist Governor of Tokyo Ishihara was the one who started the flare up over the islands by trying to nationalize them, the same Governor who thinks post menopausal women should die, the same Governor who used racial slurs to refer to non Japanese and thinks World War 2 was a friendly military exercise.

The fact that the Philippines arbitraily claimed the Spratly islands out of thin air and lied that it was terra nullius after the Republic of China (Taiwan) occupied, garrisoned and claimed the islands also never features in the western media for some reason.

Vietnam inviting India to drill in disputed EEZs also somehow never is the reason. Only when China does something foreigners have the gall to claim that disputes are being used to "flare nationalism".
 

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