Japan protests Chinese ban on shipping near disputed gas field

Japan protests Chinese ban on shipping near disputed gas field

Tokyo (Platts)--17Apr2006

Japan has formally protested China's move to ban shipping in a disputed
area of the East China Sea close to the median line between the two countries,
Shinzo Abe, Japan's Chief Cabinet Secretary, said Monday.

Abe was reacting to Chinese maritime authorities issuing a notice
forbidding ships from an area near the Pinghu gas field in the East China Sea,
while it undergoes expansion work between March 1 and September 30 this year.

News reports said the ban had been imposed while Chinese workers lay
pipelines and cables in the area. Japan and China have been at loggerheads
over Chinese companies developing gas fields that Tokyo claims might tap
resources in its waters. China does not recognize the median line.

"We have protested to China that the country's ban on ship traffic may
infringe both Japan's sovereignty and the Convention on the Law of the Sea,"
Abe told a press conference in Tokyo. However, Beijing remains firm on its
refusal to recognize the median line separating the two countries' exclusive
economic zones, he said.

The area demarcated by the Chinese ban extends from 27.7 N latitude and
124.55 E longitude to 29.4 N latitude and 124.54 E longitude, Japanese
officials said, citing information available on the web site of the Chinese
maritime authorities.

Meanwhile, Japan has still not verified the authenticity of a media
report earlier this month that Chinese offshore producer CNOOC had started
full production from the disputed Chunxiao gas field west of the median line.
The media report said China had begun producing gas from Chunxiao in January,
where output had since grown to 300,000 cubic meters/day (10.6 million cu
feet/day).

CNOOC's chief financial officer Yang Hua in January said the company had
finished development and construction of the Chunxiao gas field in the Xihu
Trough. He said at the time that Chunxiao was technically ready to start
production. The downstream side of the project, which involves distributing
the offshore gas to end-users, still required some "fine-tuning," which would
delay the operational startup of the project, he said at the time.

Chunxiao is one of six fields in the 59,565-sq-km Xihu Trough area that
CNOOC believes contains total oil and gas reserves of around 77.8 million
barrels of oil equivalent.

The other fields in the Xihu Trough, which lies about 450 km (281 miles)
southeast of Shanghai, are Canxue, Duanqiao, Tianwaitian, Baoyunting and
Wuyunting.

JAPAN AND CHINA NEGOTIATING OVER NEXT ROUND OF TALKS

Meanwhile, Tokyo and Beijing are trying to arrange a fifth round of
negotiations over their gas fields row. The talks are to be held in Tokyo,
following on from the last round in Beijing on March 6-7. A government source
in Tokyo told Platts earlier this month that the next round would likely be
pushed back to May.

The two neighbors resumed informal and sub-cabinet-level talks on the
East China Sea dispute in January this year after negotiations collapsed last
October over a diplomatic row caused by Japanese Prime Minister Junichiro
Koizumi's visit in October 2005 to a controversial Tokyo shrine honoring 2.5
million Japanese war dead.

--Takeo Kumagai, takeo_kumagai@platts.com

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