TOKYO (Reuters) - Tokyo has warned that the deepening row between Japan and China could hurt Asia’s two biggest economies. The dispute was triggered by Japan’s detention of a Chinese captain whose trawler collided with Japanese patrol boats in disputed waters.
Analysts say the main issue concerns sovereignty in an area in the East China Sea with rich natural gas resources.
Here are some questions and answers about the gas dispute:
WHAT IS IN DISPUTE AND WHY DOES IT MATTER?
Tokyo objects to Chinese development of gas fields that overlap with Japan’s claimed boundary in the East China Sea. China rejects that boundary claim.
The disputed natural gas fields are in a 970-km (620-mile) trough -- called Xihu by China and Okinawa by Japan -- in the East China Sea parallel to the Chinese coast 500 km (300 miles) southeast of Shanghai.
The trough basin holds nearly 17.5 trillion cubic feet of natural gas, according to Chinese estimates, which have also said the basin could hold 20 million barrels of oil.
If these numbers are accurate, the gas reserves equal a fifth of China’s “proved” reserves: those that can be recovered given current technology.
CNOOC, the Chinese company most heavily involved in the area, has identified six fields, which it calls Chunxiao, Tianwaitian, Duanqiao, Baoyunting, Canxue, and Wuyunting, that it has said hold a total of about 364 billion cubic feet of gas.
The contention centres on the largest field, Chunxiao, which CNOOC estimates has 169 billion cubic feet of gas.
Gas is an important part of coal-dependent China’s national ambition to use more cleaner-burning fuels in its energy mix. Japan, which has almost no domestic oil or gas reserves, also wants more to lessen its dependence upon imports.
For Japan and China, wary of each other’s maritime claims and broader intentions, the dispute also carries symbolic importance.
WHAT DO THEY DISAGREE ABOUT?
The dispute comes down to how each country proposes demarcating its maritime boundary. Each maintains that international law backs its claim.
Japan says the median line between the two countries’ coasts should mark the boundary of their exclusive economic zones. Japan includes the islands claimed by both countries as its own territory when measuring from its coasts. The islands are known as Senkaku in Japan and Diaoyu in China.
China says the boundary is defined by its continental shelf, extending its zone beyond the median line.
Their overlapping claims cover nearly 210,000 sq km (81,000 sq m), an area approaching about half the size of Iraq.
China has been drilling the Chunxiao field in an undisputed area, but Tokyo fears it could drain gas on what it deems its own side through a honeycomb of seabed rocks.
In June 2008, Beijing and Tokyo agreed in principle to solve the dispute by jointly developing the disputed gas fields.
Negotiations over a treaty aimed at joint development began in July, but China postponed the next round of talks, due in mid-September, to show its anger over the territorial friction.
Past efforts to agree on joint development have foundered.
Japan has accused China of drilling for gas in violation of the agreement.
Japan may start drilling near Chunxiao if China, which has brought in equipment, begins drilling there, the Nikkei business daily reported this month.
HOW MUCH DO THE DISPUTED AREAS PRODUCE?
Tianwaitian began production in the first half of 2006 and in 2007 output was equivalent to a modest 4 million cubic feet per day, rising in 2008 to about 17.7 million cubic feet a day, according to CNOOC. It has not released recent numbers.
Chunxiao, located less than 5 km (three miles) west of the median line, will eventually be linked via pipeline to Tianwaitian, from where gas from both platforms will go via pipeline to an onshore terminal.
Without more exploration, there is no way of knowing exactly what the area holds.
The reserve estimates from Chinese sources, cited by a United States Energy Information Administration study, are more than a decade old. China has not disclosed any more recent estimates.