Centgas looking for major new partner

A consortium formed to pipe Turkmen gas across Afghanistan to Pakistan is holding discussions with potential new leaders to steer it through a minefield of politics and war.
Sources within the consortium said the project leader Unocal, which withdrew from the Centgas project in November, was yet to be replaced and the second major shareholder, Saudi Delta Oil, had been made interim project leader.
"We are looking for a major partner, a company with an international standing and experience in such projects which could become the project leader," said an official of one of the consortium partners.
"There is a lot of interest, three to four companies have approached us and we are talking," he added.

The dilemma facing a potential partner is that the huge gas reservoirs of Turkmenistan and the waiting market of Pakistan are split by war ravaged Afghanistan.
While the gas supply and demand are clear factors in the viability of the project, the timing of when the gas can be transported through Afghanistan to link the two markets is unclear.
The Taleban militia, which controls about 90 % of the war-torn country, is recognised by only three nations as a legitimate government.

Unocal withdrew from the consortium trying to build the $ 1.9 bn 1,400 km pipeline from Turkmenistan's Baultabad gas fields to Pakistan's southern Multan city after U.S. cruise missile attacks on the suspected terrorist training camps of Saudi dissident Osama bin Laden in Afghanistan.
Unocal had a 46 % stake in the consortium which now groups six companies on an expense-sharing basis including the Government of Turkmenistan, Crescent Steel & Allied Products of Pakistan, South Korea's Hyundai Engineering , a unit of Japan's Itochu, CEICO and Indonesia Petroleum of Japan (INPEX).
The official denied reports saying that Unocal was interested in rejoining the consortium or that the Argentine-based company Bridas had shown interest in buying out Unocal's stake. "The withdrawal of Unocal is effective, there is no change of heart as far as I know. Though I can't comment for Bridas but they have not approached us nor are we holding any negotiations with them," the official said.

A senior official of the Ministry of Petroleum and Natural Resources said the reports were wrongly attributed to the ministry and it was up to the consortium partners to decide if any company wanted to join them.
"There may be a number of companies interested to join the project but the government of Pakistan is not a consortium member so we can't say who should or can be part of the project," the ministry official said.
"We are interested to the extent that we need the gas," he added.

The consortium official said the project was viable because of a confirmed buyer, Pakistan, which needed low cost natural gas to replace more expensive furnace oil used by its oil-fired power generation plants.
The seller, Turkmenistan, was also desperately seeking a buyer for the 30-year reserves after it lost its previous consumer, the Russian Federation, he added.
He said the project envisaged 1 bn cfpd supply to Pakistan which would be raised to 1.5 bn cfpd later.
An indicative tariff of 75 % of the international furnace oil price was set in September 1997, he said.

In a meeting between the foreign ministers of Turkmenistan and Pakistan in Islamabad last month, both sides said they remained interested in the project despite Unocal's withdrawal.
The official said a Taleban minister dealing with mining and energy was due in Islamabad soon and talks were likely to include the prospects for the project.
The ministry said a tripartite meeting between Pakistan, Turkmenistan and the Taleban was also planned in the next two months and would be discussed during the Afghan minister's visit.