China has successfully taken over the operational control of Pakistan's Gwadar Port.
After pull out by Port of Singapore Authority (PSA) of a 40-year port management and development contract signed in 2007, China will operate the port, which is strategically located close to the Pakistan-Iran border and the Strait of Hormuz in south-western Balochistan province, reports the Daily Times.
The contract of operation of Gwadar Port has been given to China Overseas Ports Holding Company Limited.
The business community is terming the deal a great success as it will offer an energy and trade corridor that will connect China to the Arabian Sea and Strait of Hormuz, a gateway for a third of the world's traded oil, overland through an expanded Karakoram Highway. They said it would cut thousands of kilometres off the distance, which oil and gas imports from Africa and the Middle East have to travel to reach China.
The port has the potential to serve as a secure outlet as well as storage and trans-shipment hub for the Middle East and Central Asia oil and gas supplies through a well-defined corridor passing through Pakistan.
China has contributed about 198 million dollars of the initial investment for the port project. It was expected that Chinese companies and exporters would handle their own cargo and this would make Gwadar Port one of the busiest in the region.
China will likely re-launch the Gwadar oil refinery project, which was halted in 2009 because of security concerns in the province. The refinery, which will have a total capacity of 19 million tonnes of oil per year, is actually a part of a planned Pakistan-China energy corridor.
The operational control of the port will enable China's access to the Indian Ocean, which is strategically important for China as it expands its influence across the region.
Gwadar Port will be connected with China's western province of Xinjiang through rail and road links.
On January 30, 2013 the Federal Cabinet Committee had approved the transfer of Gwadar Port to China. (ANI)