This translates to China losing roughly half a billion dollars per year through pipeline shipments.

In comparison, it costs just $2 per barrel to ship oil from the Persian Gulf to the east coast in China. One study estimates it would cost approximately $10 a barrel to move oil from Pakistan to western China through pipelines, with an additional $5 to deliver oil to demand centres in the eastern region. Research has shown that pipeline-centric oil-supply projects tend to be economically unsustainable. The logic for adding another pipeline via difficult terrain and an unstable region is incomprehensible.įurther, as temperatures at that altitude can go as low as negative 30 degrees Celsius, the pipeline will need extra heating as well as insulation material. The physical geography is characterised by steep valleys, glaciers and waterfalls, and there is periodic danger associated with earthquakes and landslides, making for potentially burdensome repair and maintenance costs.

Starting from sea level, it will have to cross the 4700-metre Khunjerab pass to reach the Chinese mainland, requiring heavy pumping equipment and significant power supply to keep the pipeline flowing. The oil pipeline scheme, however, is economically unsustainable.įrom the Gwadar Port, as the offloading space for oil imports, through to its connection to Kashgar in China's Xinjiang province, the oil pipeline must traverse the formidable Himalayan region. It initially attracted US$46 billion in investment, which was later increased to $62 billion by April 2017, to support large-scale “infrastructure construction” and industrial development, with a “comprehensive transportation corridor” linking Pakistan to China.Ī proposed oil pipeline is intended to avoid the dangers of a possible blockade at the Malacca Strait, a scenario known as the Malacca dilemma, which many policy analysts believe the US could use to China's disadvantage. The China Pakistan Economic Corridor (CPEC) is one of the flagship projects of the Belt and Road Initiative (BRI).

China pakistan highway