Pakistan, Afghanistan and Turkmenistan sign pipeline deal

Dec 27, 2002 01:00 AM

The end of 2002 has been seeing progress on the linking of energy-rich Central and West Asia to gas-deficient South Asia through the signing of the first of two long-delayed pipeline agreements.
During their leadership summit in Ashgabat on Dec. 26-27, the leaders of Pakistan, Afghanistan and Turkmenistan signed an agreement facilitating the laying of a $ 2 bn to $ 3 bn gas pipeline from Turkmenistan's gas fields to Pakistan through Afghanistan.

Iranian President Mohammad Khatami's current visit to Pakistan also signals movement in a second ambitious project -- an Iran-Pakistan- India pipeline project that Tehran calls a "pipeline of peace." The pipeline project to be signed would originate in Turkmenistan's Daulatabad gas fields, which have proven gas reserves of 23 tcf, pass through Afghanistan, then end at the Pakistani seaport of Gwadar.
There, gas would then be converted into LNG for export to Japan and other Asian countries -- and possibly even to India if New Delhi and Islamabad can settle their political differences. Turkmenistan's deputy prime minister, Yolly Gurbanmuradov, says that construction work on the pipeline is planned to be completed in 2005.

Parallel developments are occurring on the Iran-Indian pipeline traversing through Pakistan. On Dec. 15, Iranian Foreign Minister Dr Kamal Kharrazi told that the three countries are looking at the most economical route to transport gas from Iran to India through Pakistan.
Feasibility studies, he said, would be completed in a few months. "Although there are still some questions on the security of the pipeline and other matters, I think the construction of this pipeline is in the interest of all the countries of the region, that is why I call it the pipeline of peace," Kharrazi explained. "We are optimistic that better understanding would soon prevail between India and Pakistan and this project would materialize," he added.

Pakistan and Iran's active pursuit of the Iran-India pipeline has also become possible after the US-ledouster of the Taliban -- which Islamabad at one time backed and Iran opposed - -- from Afghanistan late last year. But this improvement in ties has been matched by a deterioration in Indo-Pakistan ties, so that it is now Iran that is giving guarantees of pipeline security to India. Pakistan gave the same guarantee in support of the project to Iran in 2000.
But the security concerns linked to the pipeline project do not only have to do with India-Pakistan hostility. Similar fears have been expressed about the fact that the control of Afghan President Hamid Karzai does not yet extend to the entire country, which makes it difficult to ensure the security of the Afghan portion of the project.

Ahmed Rashid, author of bestseller “Taliban-Islam, oil and the new great game in Central Asia”, says the Turkmenistan-Pakistan pipeline is feasible with political will, but "I can't see it happening until the central government in Afghanistan extends its writ." Another hurdle -- the conducting of the feasibility of Pakistan- Turkmenistan line -- was removed in August, when the Asian Development Bank (AsDB) agreed to give $ 1.5 mm to fund the study to be completed next year.
The AsDB's strategy and programme for Pakistan for 2002-2006 says its priorities from the region include the development of transport networks, and oil and gas pipelines and power transmission, to link Afghanistan and Central Asia to Pakistan. Under their discussions on the pipeline, the parties will ensure the protection of investments in the project.
Pakistan shall provide the transit of gas to the Gwadar port, which is under construction in the southwest, and provide assistance for the development of a gas-processing infrastructure as well as unobstructed export of processed gas products to markets abroad.

The three countries have agreed not to levy any taxes, royalties, profits on the activities related to the implementation of the project and on the transportation and transit of gas. They can also use the pipeline to offload gas for their own consumption or inject their own gas under clear commercial terms. This will enable Pakistan, in case the pipeline ever reaches India, to offload or inject its gas according to its needs.
According to officials, this clause was incorporated to benefit Pakistan and Afghanistan in the future. Afghanistan's gas reserves are yet to be explored, but gas in Pakistan is in surplus. However, it is estimated that in four years time, Pakistan's gas production of 27 tcf would not be enough to meet its growing energy needs. More than 60 % of its main gas source, the Sui field in western Balochistan province, has already been consumed.

Today, Pakistan imports oil at the cost of $ 3 bn. Last year, the country consumed 45.4 mm toe energy, comprising 40.6 % oil, 43.6 % gas, 10.1 % hydroelectric, 4.6 % coal and 1.1 % nuclear.
The proposed gas lines are routed to become a network. The one stemming from Iran would pass through the Balochistan to southern Sindh province to India, and the second coming from Afghanistan would go to central city of Multan then to Gwadar.

Source: Inter Press Service
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