US supports proposed Trans-Afghan gas pipeline

Jul 10, 2002 02:00 AM

The United States has reiterated its commitment to supporting the proposed Trans-Afghan pipeline. US Ambassador to Ashgabat Laura Kennedy told that the project would play a stabilizing role in the volatile region, and would have a positive impact on Afghanistan’s future prosperity.
The proposed route of the 1,500 km pipeline would thrust from Dauletabad in Turkmenistan, via Kandagar in Afghanistan to terminate in the Pakistani port of Gwadar, on the Gulf of Oman (bypassing Iran). Turkmenistan currently has access to no other pipeline in the country to export its gas. The only existing high-capacity transportation route for its gas runs through Russia. Kennedy commented that the pipeline would increase options for Turkmenistani gas exports.

On May 30, the leaders of Turkmenistan, Afghanistan and Pakistan met to sign a Memorandum of Understanding for the project. In practice, this means the three states will now begin work on a feasibility study for the planned pipeline. The pipeline cost is expected to hover around the $ 2-3 bn mark, but so far no major energy companies have stepped forward to form a consortium.
Mohammad Ali Razim, Afghanistan's minister of mines and industries, said back in May that Kabul still hoped to see Unocal participate in the gas pipeline’s construction. Unocal of the US and Bridas of Argentina both expressed interest in the project in the 1990s, and Unocal was chosen over Bridas to form a consortium for its construction. As the war-torn region degenerated into chaos, however, Unocal pulled out of the CentGas consortium in 1998 amidst allegations that it had overly close dealings with the Taliban.

Even though an interim government has now been installed in the region, and the pipeline has won approval from the US government, the project is unlikely to find its way back onto Unocal’s agenda. Teresa Covington, a spokeswoman for Unocal, has said that the company reinvested its available capital and resources in various projects in Azerbaijan since its withdrawal fromthe Central Asian region as a whole in 1998. Unocal now has no intention of becoming involved again in the trans-Afghan pipeline project, Covington said.
Many hope that the United States may play a central role in the project’s revival, in its efforts to reintroduce stability to the region. With Washington’s official backing, other energy companies may also be attracted to a potential consortium. Yet even so, the continued upheaval in the region does not bode well for long-term investment.

Source: Turkmenistan Press via NewsBase
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