China's "bargaining power" on East China Sea gas field: Very Strong

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

  1. 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.
  2. 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.)
  3. 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.
This probably explains why Japan was unable to (or passive) exploiting the gas field all these time, apart form the reason that the field is on China's side or the disputed area.
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.
Note (*): For those interested in undersea pipeline laying check out Ormen's construction chronology and a presentation.
  1. A huge cutter and an undersea tench machine is used to open a 2 m deep and 10 m wide trench
  2. Pipes are then layed and fixed on the trench


Anonymous said...

You miss the point - which is that a pipeline is much more practical for China to build a pipelinefrom where the fields are, because of teh shallower water leading from the fields to the Chinese coast.

As for the fields spreading across borders, I think you have a point that Japan wants a percentage, but all China has to do is say "ok, you can have a percentage, but you have to transport it yourself." Again, Japan is stuck because of the pipeline issue.

Sun Bin said...


the map is based on a Japanese map, see here.

those 2 squares are the platforms set up by China. They are correct within the accuracy of how I handle the mouse.

No one knows the exact location of the whole field is, or how connected it is. I did not attempt to draw it. Though I believe it probably extend into the disputed areas (but definitely not the undisputed Japanese seabed territory)

I am aware of the Saddam Siphoning argument and I mentioned it in the post. That is what they are going to negotiate about.

Not equally impractical, that is the point of this post. China already set up the pipeline, even though they are technologically backward. See the first map, the depth is less mostly less than 100m for China's pipeline. For Japan, it has to either cross the Okinawa Trough (2940M) or take a detour to near Tsushima Strait.
Good luck! :)

Sun Bin said...


that is my point :) shallower and flatter.

it is likely that the field in the disputed area will be shared by both after the negotiation. Yes, that is what China should do, but also bear in mind that technology will improve and it is better to reach a deal before they have the technology, if such a deal is reasonable. What japan asked for now is definitely unreasonable, but that is theit asking price in a negotiation.

Sun Bin said...

I never said they were just the 2 squares. But they are "around" those squares. Wherever they are, they still fall into the disputed zone, not 'undisputed areas' like the 2 squares.

Pipelines, to Kyshu North only, and you still have to carefully avoid the uneven sea surface, while avoiding the (undisputed) Chinese areas. It is quite a challenge.
Yes, uneven seabed definitely makes it a lot more difficult, so it the depth. (you are missing the point by not clicking into my link on "world record of depth in black sea" !)

I also added a link for why uneven seabed is tough for laying pipeline. It is not that hard to imagin the difficulty, is it? you are laying straight pipes on a rough surface, you have connect them so that it will be airtight despite underwater current movement.

Sun Bin said...

compare this bathymetry map for East China Sea with that of Ormen Lange (middle top edge of the map) to Leeds .

the continental shelf is more rough toward the edge, so is ocean current. Ha!

Anonymous said...

Couple of extra points:
1. Sun Bin ignores the dirty little secret that most of the gas/oil is probably on the Japanese side of their claimed median line. This, of course, is why China proposes joint development only on the Japanese claimed side of the median line. China then pretends it is shocked Japan doesn't go for a deal.
2. Sun Bin ignores the possibility that Japan might want to sell the gas/oil to China via a pipeline to China rather than the supposedly uneconomic option of getting it back to Japan. Sadly most eager proto-nationalists ignore this potentially mutually satisfactory outcome.

Sun Bin said...

This post does not conclude on the legitimacy of the claim of either Japan or China. The post is about the practicality of extraction.

Now since you have raised the question.
1a. No one really know where the gas locates. Not even where exactly under Gulf of Mexico. Exploration is a complicated and approximated science.
1b. You seemed to agree to Japan's claim. But you probably need to read the UN law governing seabed rights (see link provided above). I said I would leave that to the legal experts
1c. Of course the negotiation is on the disputed area. What is your point here? You are not suggesting China to share their side of the field, are you? :)

China is actually dealing with Japan for a compromise at this moment. Both sides want a deal, but their starting points are still far apart.

2. yes, sell to China is an option. i have, in fact, listed Joint Venture as an option for Japan. where Japan can also ship the LNG back to Japan after processed near Ningbo. what this means is that the face cards on Japan's table does not look too good and the deal would be less favorable to them.

Anonymous said...

Is Japan a signee of the United Nations Convention on Law of the Sea? If yes, Japan's claim to the median line and therefore the disputed gas field is extremely weak, if not unreasonable.

Sun Bin said...

I would think Japan is.

According to some analysis (by Chinese, so it may be biased), EEZ governing the fishing right and Japan has a point in the median line. But continental shelf governs the seabed right, in that case Japan's argument is very weak.

However, Diaoyu plays a crucial role here. Because Diaoyu is on the continental shelf. You can look at it in 2 ways
1. Japan can claim its extension from Diaoyu (without going through ths sea trough)
2. China can claim Diaoyu based on "natural boundary" (the sea trough)

Anonymous said...

hello sun bin,

what do you think of this


Anonymous said...

sorry, broken link, here it is again,


Sun Bin said...

The link works fine. Thanks.

Interesting, Senkaku(Sharp Point Attic) comes from British name Pinnacle.

I think China has a pretty strong case, based on
1. discovery (historic document)
2. geography (continental shelf), as shown in my map above and in the end of the article you linked
3. the dispute between governors of Taiwan and Ryukyu in 1930s, where court in Tokyo ruled Diaoyu to the Taiwan colonial governor

However, China (both PRC and ROC) failed to reclaimed it (basically ignored it) after WWII until 1971, which has lead to the current dispute and provided Japan with the 'legal' basis.

Anonymous said...

Hello sun bin,

Some years ago barry wain wrote in the rabid anti Chinese asian WAR street journal that the diaoyu dispute shows Chinese aggressiveness, he suggested uncle sham should help defend this “Japanese territories”. One gent showed him this article by professor Kiyoshi Inoue and the Tokyo court ruling awarding diaoyu’s sovereignty to Taiwan. This shut barry wain up for good and he never talked about diaoyu again, even though he kept yapping about china’s other “aggressions”.
The yanks bias regarding the quarrel between china and japan seems to be downright racist.

Sun Bin said...

I think 'racist' is probably not the reason in this particular issue. Japanese and Chinese are both yellow and asian.

It is more about the misconeption about "ideology" and the perception that China is potentially a more formidable competitor (due to its size).

Yes, there may be racial element regarding other issues, e.g., in containing Asian countries in general (15-20 years ago it was Japan threat wolf crying). Now it is probably just some people trying to demonize China, conveniently using Japan.

I guess China just have to live with this. Not much they can do other than more communication. There are many rational voices such as Thomas Barnett and many in the academics circle.

Sun Bin said...

That old man does not look cute to me. But he certainly is a lot more rational that people like Kaplan :)
even your pal 'younghusband' thinks so.

Anonymous said...

You claim Japan's case is very weak. I would disagree, it is at least as strong as Chinas. For years, Beijing has asserted its sovereignty extends as far as an area near the Ryukyu Islands. To defend its argument, China cites the judgment given by the World Court in the North Sea Continental Shelf Case in 1969, which pitted West Germany against Denmark and the Netherlands. The court ruled that the continental shelf of a given nation constituted "a natural prolongation of its land territory."

In later years, however, the median line--a line of demarcation drawn midway between the coastlines of two nations--has been used as a basis for the settlement of similar disputes. Examples include the World Court's 1985 ruling on the case involving continental shelf delimitation between Libya and Malta and the court's 1993 judgment on the case concerning maritime delimitation in the area between Denmark's Greenland and Norway's Jan Mayen.

The 1985 ruling states that if the distance between the coasts of two nations is less than 400 nautical miles, geological or geophysical factors within that distance do not have any role to play in determining the legitimacy of each country's claim to a continental shelf subject to its sovereignty.

It should be noted that China and Vietnam agreed to draw a line of demarcation midway between their coasts to delimit the Tonkin Gulf in 2000 (as you are happy to refer to in another context in another post. Why is the ECS different?). The two nations also agreed to conduct a joint natural resources development project in waters straddling that line. (not just on Vietnam's side of the line, again, why is ECS different?)

Sun Bin said...

I am not an expert int'l laws. So you may be right.

there are a few points though.

1. Vietnam is a continental country, it shares the continental shelf with China. A totally different case. So far all you have quoted is dispute between 2 continental countries.

2. I guess Denmark is also sort of continental. So China's case is strong than Denmark

3. You cannot claim beyond the sea trough deeper than 2500 (Okinawa Trough 2900-2940m). I think China claims as far as about 2000M mark west of the Trough.

4. I think China is willing share part of the disputed area in a negotiation. However, China will definitely take the west side of the disputed area where the extension of Chunxiao gas field is located. Therefore, China is only siphoning on its own share of the disputed land, if "siphoning" could be taken seriously.

Given the example of the North Sea, it is still likely that there might be oil field further east. But it is not the same field.

Also, further south near Diaoyu the demarcation line might end up to be closer to the median line and Japan might have some rights there.

-- I do hope there is some treasure under Japan's side, so that both sides could be happy.