RANAI, Indonesia, Aug 26 (Reuters) - The word "sleepy" could have been invented for Ranai, the largest town in Indonesia's remote and sparsely populated Natuna archipelago.
It has few cars and only two sets of traffic lights. The cloud-wreathed mountain looming over it resembles a slumbering volcano. Nearby beaches lie pristine and empty, waiting for tourists.
From Ranai, it takes an imaginative leap to see Natuna - a scattering of 157 mostly uninhabited islands off the northwest coast of Borneo - as a future flashpoint in the escalating dispute over ownership of the South China Sea, one of the world's busiest waterways.
But that's precisely what many people here fear.
They know Natuna is quite a prize. Its fish-rich waters are routinely plundered by foreign trawlers. Lying just inside its 200-nautical-mile exclusive economic zone is the East Natuna gas field, one of the world's largest untapped reserves.
And any quarrel over Natuna would also upset a delicate strategic balance, undermining Indonesia's role as a self-appointed honest broker in the myriad territorial disputes between its Southeast Asian neighbours and regional giant China.
Jakarta's foreign ministry insists there is no problem with China over the status of Natuna, but the Indonesian military has in recent months struck a more assertive tone.
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