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Of sichuan is with 80 million inhabitants the most populous of china's provinces and hosts several large industrial centres. the contiguous booming municipality of chongqing - with 31 million inhabitants china's biggest city - and its chemical industry are also a potential market for these oil supplies. coping with the btc threat the opening of the btc pipeline in may 2005 alarmed chinese policymakers, mainly because of its possible consequences for china's imports via the chinese-kazakh pipeline, which were widely reported in the chinese media. in fact, in 2004 azerbaijan was only able to export one fifth of the amount of oil needed to operate the pipeline at full capacity. moreover, in the past few years no major find has been made in azerbaijan that could fill the huge gap. therefore, the us once again pressured kazakhstan to build a pipeline from aktau to baku to supply oil to the btc pipeline. chinese analysts stated that if the kazakh side would promise to supply specific amounts, the flow of oil to china could be threatened.302 kazakh officials, giving in to us pressure, have already declared that the chinese must make certain that there is enough oil to ship to china.303 since china has already invested heavily in the chinese-kazakh pipeline, insufficient oil supplies would leave the chinese with considerable financial losses and a long-term effect on china's energy security. accordingly, chinese analysts urged the chinese government to stand prepared to do what is necessary to guard against a defeat like the one china had suffered during the negotiations over the proposed angarsk-daqing pipeline a few months earlier.304 despite the uncertainties, the fast progress of the chinese-kazakh project alarmed the russian oil companies rosneft and lukoil. they were afraid that there would not be enough demand for russian oil in china after the completion of the pipeline. yet these fears were unfounded, as cnpc will still need russian oil to fill the pipeline. additionally, until the completion of the taishet-nakhodka pipeline, russia will be able to use the chinese-kazakh pipeline to export oil to asia in order to diversify its export directions. in late 2005, russia, kazakhstan, and china agreed upon the delivery of russian oil to central kazakhstan through the omsk-turkmenabat pipeline. the russian oil will be shipped to central kazakhstan and then further through the chinese-kazakh pipeline to china. all three parties were more than content with this deal.305 to sum up, the caspian basin region is one of the few major oil-producing regions open to foreign direct investment. in order to lessen their dependency on the middle east, the major oil-importing countries are keen to diversify their oil supplies. as a result, all major international energy companies have tried to acquire stakes in the caspian region's energy riches, especially in kazakhstan. china's decision to build a pipeline to xinjiang was based on strategic considerations and the need to diversify its oil supplies. despite various economic and political obstacles, the chinese leadership is determined to go through with the project and will continue to assist the chinese oil companies in acquiring oil concessions and investing in energy infrastructure in central asia in order to bring more oil to china.
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