Afghanistan, Pakistan and Turkmenistan sign gas pipeline study memo

Jun 05, 2002 02:00 AM

Afghanistan's interim leader Hamid Karzai, Turkmenistan's President Saparmurat Niyazov and General Pervez Musharraf, Pakistan's president, met in Islamabad on May 30 to sign a Memorandum of Understanding on a gas pipeline project.
The document calls for the three states to begin work on a feasibility study of the planned pipeline, which would run through Afghan territory from Turkmenistan to Pakistan. It also states that Afghanistan, Pakistan and Turkmenistan will seek financing for the project, which is expected to require at least $ 2 bn in investments.

The pipeline will follow a 1,460 km route from Turkmenistan's Dauletabad gas field to Gwadar, a port on Pakistan's Arabian Sea coast. The gas will then be liquefied at a plant in Gwadar so that it can be exported to foreign markets. Musharraf also said that the pipeline might be extended to India. Pakistan is willing to overlook its differences with India for the sake of seeing such a pipeline built, he said.
Musharraf said after the memorandum was signed, that the pipeline project could be completed in the near future now that conditions in Afghanistan were improving. Karzai, for his part, said that the pipeline would be built even though Afghanistan still faced certain security concerns.
The two men said they would meet with Niyazov for more talks on the project in October. By that time, they said, working groups will be set up to discuss matters related to the gas pipeline and other areas of cooperation, such as proposals for the establishment of rail and transport links and the construction of an oil pipeline parallel to the gas line.

So far, no major international energy companies have offered to help build the pipeline. Mohammad Ali Razim, Afghanistan's minister of mines and industries, said last month, however, that Kabul still hoped to see Unocal participate in the construction of a gas pipeline through Afghan territory from Turkmenistan to Pakistan. The US company is at the head of the list of companies that would build this pipeline, Razim told.
Unocal did not respond publicly to Razim's statements. The US company backed out of the pipeline project in 1998 and apparently has made no serious move to re-engage since them. Its last public statement on the matter was issued on September 14, 2001; that statement addressed charges that Unocal had worked too closely with the Taliban militia, Afghanistan's former leaders, and reiterated that the company was no longer involved in the pipeline plans. Nevertheless, Razim indicated that the project was moving forward.

The Asian Development Bank (ADB) has begun studying routes for prospective branch lines that would bring Turkmenistani gas from the main pipeline to Kabul and to iron ore mines west of the capital, at the Haji Gak pass, he said. The bank will make the conclusions of its surveys public once its finishes surveying the pipeline routes, he said. ADB loans will be used to cover part of the cost of building the gas transport system, he said, and funds from donor countries will cover the rest.
Razim also stated that Afghanistan hoped to assume ownership of the gas conduit after 30 years. In the meantime, he said, the country will ask users of the pipeline to pay transit fees in accordance with international norms. Afghanistan will assume all responsibility for the security of its section of the pipeline, he added.

Since the US government launched military action in Afghanistan last autumn, observers have been speculating that Washington will seek to revive the pipeline plan. Indeed, US officials have expressed enthusiasm for the project, saying it could serve as a stabilizing factor in war-weary Afghanistan. Turkmenistan, Pakistan and Afghanistan have also been keen on the project, but so far major energy companies have not stepped in to begin the work.
In the 1990s, Unocal of the United States and Bridas of Argentina both made attempts to form consortia to build a Turkmenistan-Afghanistan-Pakistan gas pipeline. Turkmenistan chose Unocal to lead the projectin the fall of 1997. The US company remained committed to the project over the next year, even as it fought off a lawsuit filed by Bridas, which claimed that Unocal had interfered with its business in Turkmenistan.

But the continuing war in Afghanistan, as well as protests in the United States over human rights abuses by the Taliban, made it impossible for the project to succeed. Unocal finally backed out of CentGas, the consortium set up to build the pipeline, in late 1998 after international financial institutions made clear that they would not help cover the cost of the project as long as Afghanistan was racked by armed conflict.
The overthrow of the Taliban militia and the creation of a new government in Kabul has brought the project to light once again. Yet the continued volatility of circumstances in the region -- despite the assurances from Musharraf and Karzai -- suggests that it may take several years of political stability before the project could be seriously revived.

Source: NewsBase
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