I am not talking about UN Sea Law of Continental Shelf (350km as long as seabed is less than 2500m deep, this applies to "seabed and subsoil of the submarine areas", not EEZ on surface), nor the fact that the gasfields are on China's side even according to the median line proposed by Japan. I am talking purely from a commercial (cost) perspective. It is virtually infeasible for Japan to pump gas back to Kyushu or Okinawa.
Here is why
- The only economical way to transport gas is using pipeline, because gas is too bulky. For a distance of about 180km, the cost for LNG (liquefied and then use tanker) is 5 times higher (see graph below), and it is extremely impractical and dangerous to liquefy the gas using high pressure on a drilling platform.
- Now look at this cross-section map, left side is China, the island on the right is Japan. the deepest point in the Okinawa Trough is 2940m under sea. The slope on Japan's side is also a lot steeper (Source: China claims A,B,C under UN Law). From Chunxiao to Zhejiang coast the depth is mostly less than 100m. (Note, the shape is more pronounced near the Diaoyu Islands.)
- There is more bad news for Japan, The World's Deepest Undersea Gas Pipeline so far completed is only 2100m undersea (built by Italian below Black Sea). The engineering challenge for a North Sea pipeline (Ormen Lange to Britain) with undersea hill of 60 m high is considered as "enormous" (See note*). Unless there is technology breakthrough or take a huge detour up north via the south of Korea (also impractical as it passes China's EEZ), there is no way Japan can get that gas home.
Is this fair? Well, I think this is a result of the 'continental shelf' argument. Scientifically, you can say that all these fossils come from organisms flushed down from the continent or sea organisms live on the nutrients flushed down from the continent. But I better leave this to the legal experts.
Now, what about strategies?
- China: keep drilling at maximum speed, meanwhile negotiate slowly with Japan. If there is really "siphoning" effect, the longer the wait, the more China will be able to "siphon" the whole pool. Time is on your side. But make a deal if it is reasonable, don't under-estimate Japanese engineers.
- Meanwhile, try to engage the engineering firms who built the pipelines in North Sea, Black Sea and Canada into the game, to sign exclusive contract with them (for East China Sea and South China Sea) so that they won't be helping the competiting companies in these areas
- Japan: seek a co-development deal, in which China and Japan will form a JV to explore and extract the gas field, even if that means substantially smaller share for Japan. Also be flexible about the disputed area, if needed, exchange seabed exploration for fishing right in the disputed area. Because, it is impractical for Japan to drill without using China's shore to land deliver the gas.