Central Asia's pipeline puzzle to move on

May 26, 1997 02:00 AM

May 12, 1997 Leaders of 10 Asian states descended on Turkmenistan seeking a solution to the complex problem of getting vast energy reserves from landlocked Central Asia to international markets.
The war in Afghanistan, where some neighbours fear a summer offensive by the Taleban could bring the purist Islamic militia to the borders of the shaky former Soviet states of Central Asia, will cast a shadow over the summit.
Leaders of the Economic Co-operation Organisation, grouping Turkey, Pakistan, Afghanistan, Azerbaijan, Iran, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan will discuss transport issues in the Turkmen capital Ashgabat.
Plans for pipelines to export massive amounts of oil and gas from the former Soviet states to the West are charged with diplomatic and political intrigue. For beneath Central Asia's placid surface is a new "great game" for the control of oil flows from the crude-rich Caspian basin. Russia and the United States are playing no small parts. The main problem faced by oil-rich ex-Soviet states is an almost total reliance on Moscow for the export of their resources through the Soviet-era pipeline network. This has severely restricted oil flows from Kazakhstan and brought Turkmenistan to its knees after Russia "diverted" Turkmen natural gas exports away from European clients with cash to other former Soviet republics who cannot pay.
Turkmenistan doubled bread prices recently as an almost direct result of Ukraine's and other states' unpaid gas bills and the poor desert nation is looking for a way out south.
For risk-conscious western oil companies, which the Central Asian states look to bankroll development of their energy resources, the alternatives to Russia look no more reassuring.
Iran is subject to a United States embargo over allegations by Washington that the Iranian government sponsors terrorist groups. This rules out any cash from US oil companies for developing an export route through Iran to the Gulf.
A corridor west to Turkey through the restive Caucasus region, awash with guns and simmering ethnic disputes, is fraught with problems, as is a third route through Afghanistan.
Added to the war in Afghanistan are the complications of who can authorise deals. The Taleban, which control three quarters of the country, will be conspicuous by their absence at the summit. Ousted President Burhanuddin Rabbani is invited instead.
Pipelines are, however, either already under construction or planned on all three routes through Iran, Turkey and Afghanistan. Perhaps the most ambitious is Unocal's and Saudi Arabia's Delta Oil's plan to build a $ 2 bn gas pipeline through Afghanistan to Pakistan. The pipeline would carry 20 billion cm of gas a year, with an oil pipeline to be laid eventually along its 1,500 km (1,000 miles) route. Plans for an additional 28 bncm of gas to flow from Turkmenistan through Iran to Turkey would free the ex-Soviet state entirely from the Kremlin's clutches.
"Together we will build roads, railways, gas pipelines," Iranian President Ali Akbar Hashemi Rafsanjani told Turkmen President Saparmurat Niyazov. That Rafsanjani made the meeting, despite an earthquake in his country which killed over 2,000 people, is testament to the importance Iran attaches to its ties in Central Asia.

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