China is reaping energy rewards for standing by Iran, with Tehran now promising Beijing with new deals once the sanctions related to the Iranian nuclear programme are lifted.
“This country [China], as one of the biggest buyers of Iran's oil, has been greatly cooperating with the Islamic Republic under conditions of sanctions and we are willing for that cooperation to continue when sanctions are removed,” said Iran’s visiting Iranian Oil Minister, Bijan Namdar Zanganeh. Last year, China bought 550,000 barrels of Iranian oil per day, marking a 28 per cent spurt in consumption over the previous year.
Anticipating a phased end to sanctions after a final nuclear agreement with the six global powers is signed in June, the Iranians have been quick off the blocks to engage with China. The upbeat mood was evident when Mr. Zanganeh spelt out some of the talking points for an energy partnership with Beijing in the future.
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He told the media that a new phase of energy cooperation between Iran and China would focus on oil production and development. The two countries are currently working in Iran's Khuzestan province, but the visiting Minister said on Thursday that Tehran and Beijing will redefine their cooperation and lay new ground rules for further collaboration in energy sector, IRNA reported.
Analysts say that the Chinese are keen on roping in Iran to develop the Pakistan-China Economic Corridor as part of evolving plans to establish a Maritime Silk Road (MSR). The “one belt one road,” which comprises the on-land Silk Road Economic Belt (SREB) and the MSR is Chinese President Xi Jinping’s pet initiative, meant to lift the economies of China and Eurasia as a collective enterprise.
The Wall Street Journal is reporting that China will build a pipeline that would bring Iranian gas to Pakistan, as part of a deal that would be signed during Mr. Xi’s forthcoming visit to Islamabad.
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The China Petroleum Pipeline Bureau, a subsidiary of Chinese energy giant China National Petroleum Corporation, is expected to build 700 km of the pipeline from the western Pakistani port of Gwadar to Nawabshah, Pakistan’s gas-distribution centre in the Sindh province. Pakistan would build the 80 km of the pipeline to from Gwadar to the Iranian border, where it would hook up with the already existing 900 km pipeline link to the gas fields of South Pars.
The China backed Iran-Pakistan project is being revived because the existing sanctions on Iran’s energy exports are likely to be lifted first, according to the nuclear framework agreement that was signed in Switzerland earlier this month. The pipeline scheme, conceived in 1995, was earlier supposed to extend to India, but Tehran blames India for dropping out of the project in 2009, under pressure from the United States. Indian negotiators, however say that funding the project was difficult on account of exorbitant insurance costs that were involved for transiting Iranian gas through Pakistan’s restive Baluchistan province.
The evolving triangular partnership among China, Iran and Pakistan could get reinforced after Islamabad declined to support Saudi Arabia, Iran’s chief rival in West Asia, during the on-going crisis in Yemen.