Pakistan, Turkmenistan and Afghanistan to sign accord

May 17, 2002 02:00 AM

Pakistan, Turkmenistan and Afghanistan are expected to sign a tripartite agreement to construct trans-Afghanistan oil and gas pipelines from energy rich central Asian republic to Pakistan. A foreign office official told that President Pervez Musharraf, President Saparmyrat Niyazov and Chairman Hamid Karzai have confirmed the date of the two-day summit meeting.
Besides the gas supply, a parallel crude oil pipeline from Turkmenistan to Pakistan (Multan) is also being given serious consideration. Together, the cost of the two pipelines could touch $ 4 bn. Feasibility studies have already put the cost of the gas pipeline at $ 2 bn.

The Turkmen minister for oil, gas and minerals Gurbannazar Nazarov has also confirmed to be in Islamabad on May 20, leading the advance team of President Saparmyrat. The minister would hold discussions with his Pakistani counterpart besides the foreign minister to finalize the "draft agreement" for dedicated gas supply to Pakistan. He is also expected to visit Kabul before the summit meeting.
Saparmyrat Niyazov, who is life president of the fifth largest natural gas producer Turkmenistan, has already informed Islamabad that he has dedicated Daulatabad gas field with 45 tcf proven reserves for Pakistan. Pakistan's own remaining proven gas reserves are estimated at around 21 tcf which means that it could control more than double its own reserves.

Afghan minister for mines and industries Mohammad Alim Reza is also expected to arrive Islamabad to discuss related issues with Pakistani and Turkmen oil ministers. He stated early that Unocal, the US-energy firm and former Centgas consortium leader, was still in the lead attempting to win the $ 2 bn trans-Afghanistan gas pipeline.
Chairman Afghan interim authority Hamid Karzai and Turkmen president Saparmyrat Niyazov met earlier this month in Ashgabat to discuss the pipeline project. Under the tripartite agreement, Afghanistan would ensure security to the pipeline passing through its territory against a royalty which would be calculated later.

The sources said that the pipeline has full backing of the Bush administration and some more US companies were expected to join the consortium in a bid to block entry of Argentinean Bridas or Russian Gazprom in the mega oil and gas pipeline projects.
Pakistan, Turkmenistan and Afghanistan had constituted a working group in 1998 for quarterly expert meetings to pursue the pipeline project but these meetings were discontinued in late 2000 due to widening gap between Taliban and US authorities.

Energy experts have been indicating US eyes on Caspian Sea reserves of $ 5 t with companies owned by Bush senior and vice president Dick Chenny showing keen interest. The United States is also expecting investment from US-based energy firms through Overseas Private Investment Corporation (OPIC) to reactivate over $ 2 bn Turkmenistan to Pakistan gas pipeline.
Informed sources in the energy sector said that the two sides have started initial consultations to materialize benefits arising out of the removal of economic sanctions on Pakistan in the post Sept. 11 situation that allowed OPIC and US Ex-Im Bank to finance private sector projects.

The Turkmen-Pakistan pipeline will be around 1,464 km long from Daulatabad gas field in Turkmenistan to Multan in Pakistan. It is extendible to India with additional cost of around $ 600 mm. Pakistan is estimated to face gas shortfall of around 500 mm cfpd from the next 5-6 years. The shortfall was imminent in view of the fact that the mega import pipeline project will take at least two years to complete if construction has been started.
Pakistan has been pursuing four-import projects from Iran, Qatar, Turkmenistan and UAE. Though Iran-Pak-India Trans gas pipeline project has now become the front runner, the supply is primarily meant for India. So far none of the parties have been able to muster sufficient support from the financial sector to construct $ 2 bn worth of each project mainly because of American factor, sources said.

Source: The DAWN Group of Newspapers
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