Afghan Pipeline Looks Far-Fetched as Ever
Although the idea of a gas pipeline running from Turkmenistan all the way to India has been revived in a new round of negotiations, NBCentralAsia energy experts say the project continues to look highly unlikely, not least because the route would run through conflict-ridden Afghanistan.
Other obstacles, they said, include uncertainty over whether Turkmenistan has enough natural gas to make the pipeline commercially viable, funding for this high-risk project, and possible objections from the Kremlin, which currently has a near-monopoly on Turkmen gas exports.
Meeting on April 20-25, foreign ministers from the four countries involved in the Turkmenistan-Afghanistan-Pakistan-India pipeline project attended a meeting of the scheme’s executive committee and signed a framework agreement on construction and contractual issues.
India moved from observer status to full participation in the group.
The working group also approved an increase in estimated costs from 3.3 to 7.6 billion US dollars, due to the increased price of steel.
The 1,680 kilometre pipeline would run from the large gas field at Dauletabad in southern Turkmenistan via the Afghan cities of Heart and Kandahar, and Multan in Pakistan, to reach the Indian border.
The preliminary agreement says construction should start as soon as 2010. By 2016, Turkmenistan should be pumping 60 million cubic metres of gas a day to India and Pakistan with another five million cu m destined for Afghanistan. Supply levels would increase subsequently.
A basic agreement to build the pipeline was undersigned in May 2002. The Asian Development Bank completed a feasibility study in 2005, but the launch has been delayed by the continuing lack of stability in Afghanistan and the tense relationship between Pakistan and India.
Delhi and Islamabad have recently achieved a rapprochement on the issue of diversifying their energy import sources, the idea being to draw on Central Asian resources.
During the Islamabad meeting, Pakistani oil minister Khawaja Asif said his country was strongly committed to the pipeline project, while his Indian counterpart Murli Deora noted that demand was increasing while current energy sources were limited.
Economists say India currently needs about 140 million cu m of gas a day, and according to some estimates, demand will grow to reach 220 million cu m by 2010. Pakistan is running short of gas, and experts put the deficit at between 17 and 42 million cu m a day.
Afghanistan, meanwhile, remains mired in conflict, with much of the Taleban’s insurgent activity taking place in the southwest, within easy striking distance of the proposed route. There appears to be little prospect that this security threat will recede in the near future.
Because of decades of war and economic collapse, Afghanistan lacks a gas distribution network. According to unofficial estimates, the potential demand for natural gas there is about five billion cu m annually.
NBCentralAsia experts are pessimistic about the prospects that the pipeline will ever be built.
Rovshan Ibrahimov, head of the international relations department at the Qafqaz University in Baku, argues that the lack of stability in the region impedes energy projects.
International financial institutions are unlikely to underwrite such a high-risk project potential, he said, adding that it would therefore be unwise for Turkmenistan to try to produce gas for such a route.
In addition, he said, no information has yet come out from the independent audit of Turkmenistan’s reserves.
Officials there say the Dauletabad field – which would supply the proposed southward pipeline – holds 4.5 trillion cu m of gas.
At the moment, most of the gas from this field is bought by the Russian energy giant Gazprom, which takes 50 billion cu m annually.
As an NBCentralAsia analyst in north of the country asked, “Does Turkmenistan have the spare capacity to fill a trans-Afghan pipeline? This question is still open.”
Current annual production is estimated at 80 billion cu m, of which 20 cu m is consumed domestically and the rest goes for export, mostly to Russia. Turkmenistan has signed contracts to supply Russia, China and Iran with amounts that would, in future years, exceed this total and reach 95 billion cu m.
Commentators interviewed by NBCentralAsia pointed out that the Russian might seek to prevent a rival export route from coming to fruition.
“Even supposing that all sides reached agreement, the risks were got out of the way, and the pipeline began to be built, Moscow would pressure Ashgabat for cast-iron guarantees to ensure that previously-signed supply contracts [to Russia] were honoured,” said an oil and gas specialist in Turkmenistan.
He said Russia might make concessions and buy up Turkmen gas without bargaining over the price, forcing other purchasers – like the impoverished Afghans – out of the market.
Mars Sariev, an NBCentralAsia political observer, pointed out that it was not just Russia that might have an interest in derailing the pipeline project. Iran and China both have their own plans for gas pipelines coming from Turkmenistan. Then there are European countries and the United States, which may have given this project their formal backing only as a way of promoting export routes that bypass Russia.
In Sariev’s view, “This project is never going to get as far as actual implementation.”
Tags: Pipeline , Afghanistan , USA , Turkmenistan , Oil
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