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http://www.jamestown.org/terrorism/news/article.php?articleid=2369935
Terrorism Focus
March 21, 2006

"The Baloch Insurgency and its Threat to Pakistan's Energy Sector"
By John C.k. Daly

ARTICLE SNIPPET: "While most of the world's media remains focused on insurgent attacks on oil facilities in Iraq and Saudi Arabia, Pakistan is experiencing a rising tide of violence against its Sui natural gas installations located in the country's volatile Balochistan province, where the majority of the energy-starved country's natural gas facilities are located. Pakistan, currently engaged in a drawn-out conflict against al-Qaeda and Taliban remnants in its North-West Frontier Province (NWFP), is slowly descending into conflict with anti-government forces in Balochistan province, raising the unsettling prospect of a rising second internal front against militants. A second internal front would drain resources from Pakistan's ability to maintain control over the country and its campaign against al-Qaeda and Taliban remnants in the NWFP and the Federally Administrated Tribal Areas (FATA).

Balochistan contains 42 percent of Pakistan's total land mass and is the largest of the country's four provinces. The province is strategically vital as it borders Iran, Pakistan, FATA and the Arabian Sea. The capital Quetta lies near the border with Afghanistan and has road connections to Kandahar to the northwest.

Islamabad also sees the province as essential to its future prosperity, building a $1.1 billion deepwater commercial and naval port at Gwadar on the Arabian Sea. China contributed about $200 million toward the construction cost of Gwadar's first phase, which was completed in April 2004. Chinese interest extends far beyond Gwadar; during a recent interview, Pakistani Minister of State for Investment Umar Ahmad Ghumman said that the two countries had discussed $12 billion in investment projects of interest to China including a 60,000 barrels per day oil refinery at Gwadar (Aaj TV interview, March 6).

India is also interested in Balochistan province as a transit point for a projected $4.5 billion Iran-India natural gas pipeline expected to be operational by 2010. India also discussed with Pakistan plans by both countries to import gas from Turkmenistan via Afghanistan and from Qatar (balochistan.org, March 4).

Balochistan's natural gas production is critical to Pakistan's economy."