ADB to finance Trans-Afghan gas pipeline study

Jul 09, 2002 02:00 AM

The Asia Development Bank will finance a feasibility study for a gas pipeline running from Turkmenistan to Pakistan across Afghanistan, the bank's chief economist said.
"The feasibility study will be financed from our side by a grant," Rajiv Kumar told the first working session of government delegations from the three countries involved, meeting in the Turkmen capital.

Turkmenistan has immense gas reserves but limited export options -- mostly across Russia -- and has long been keen to develop new routes. For several years in the 1990s it was keen to promote a line across Afghanistan to Pakistan, with the possibility then discussed of extending it to India.
US energy company Unocal was leading efforts to build the line, but pulled out in 1998 after deciding the political situation in Afghanistan, then under control of the radical Islamic Taliban, was too unstable. Although Afghanistan remains deeply unstable, the three countries have been quick to revive discussions on building the line following the Taliban's fall last year.

Pakistan's President Pervez Musharraf, Turkmenistan's Saparmurat Niyazov and Afghanistan's Hamid Karzai agreed to pursue the project, estimated at $ 2 bn, when they met in Islamabad in May. The three are due to meet again in October. But Pakistan admitted that there would be difficulties.
"We will do everything we can to attract foreign investors in the shortest possible time," Petroleum and Natural Resources Minister Usman Aminuddin said. "Many problems exist, including political problems, but I think we will overcome them."
Turkmen vice premier Yelly Gurbanmuradov said the World Bank was a possible investor, and noted that the US embassy had sent an observer to the meeting. A US embassy representative said the United States was highly interested in developing energy resources in the region.

Niyazov wants Turkmenistan to export 30 bn cm per year of gas to Pakistan by 2005. The former Soviet Central Asian state currently exports around 50 bn cm to Russia, Ukraine and Iran, and wants to double exports within 10 years. Turkmenistan receives around $ 40 per thousand cm from gas sales to former Soviet states, although cash-strapped Ukraine pays for part of its supplies in goods and services.
Niyazov said he hoped to receive between $ 50 and $ 60 per thousand cm from new markets reached by the Trans Afghan pipeline, although Pakistan's ability to pay in cash for such large volumes has been called into question. The proposed line will cover some 1,500 km, including 764 km across Afghanistan, where the Turkmen government believes it will create 12,000 jobs and provide annual transit income of $ 300 mm.

Source: The DAWN Group of Newspapers
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