TRANS-AFGHAN PIPELINE PROJECT FOR TURKMEN GAS BACK ON THE TABLE.

Publication: Monitor Volume: 8 Issue: 51

On March 7 in Ashgabat, Turkmen President Saparmurat Niazov and the visiting interim prime minister of Afghanistan, Hamid Karzai, agreed to readdress the project of a trans-Afghan export pipeline for Turkmen gas to Pakistan and possibly India.

The project finds favor with the United States in four interrelated contexts: ensuring the access of Caspian oil and gas to world markets, moving forward on postconflict reconstruction in Afghanistan, consolidating Pakistan economically and politically, and promoting Pakistan-India reconciliation. Public statements by White House and other U.S. officials have recently adduced these multiple considerations in support of this project. It dates back to the mid-1990s, and is now being reanimated in a form close to the original one.

Niazov initiated the reconsideration of the project in October 2001, shortly after the start of U.S.-led antiterrorist operations in Afghanistan. Anticipating an early successful completion of those operations, Niazov officially applied to the United Nations for political support for the trans-Afghan pipeline project.

On February 8, Karzai announced that he and Pakistan’s President Pervez Musharraf had agreed to place this project at the top of a development agenda, aimed at connecting Central Asia to the South Asian subcontinent and the ocean. Karzai described the project as “very essential” and “beneficial for the entire region” in that broader framework (Asia Times, February 18). On February 12, Niazov received Afghanistan’s interim minister for energy, Muhammad Shaker Kargar in Ashgabat for discussions on the trans-Afghan project (Neytralniy Turkmenistan, February 14).

In its original form, the project envisaged a pipeline approximately 1,500 kilometers in length, originating at the giant Dauletabad field in southeastern Turkmenistan and plugging into Pakistan’s gas transport network at Multan, with a possible 640-kilometer extension to India. Initial throughput capacity was planned at 20 billion cubic meters annually. The cost was estimated at US$1.9 billion from Dauletabad to Multan, plus US$600 million for a possible extension to India.

The American company UNOCAL was the force behind the original project, under active consideration from 1995 to 1998. The Central Asia Gas Pipeline (CentGas) consortium, formed in 1997, included UNOCAL with a 54-percent interest as operator of the project, Saudi Arabia’s Delta Oil with 15 percent, the government of Turkmenistan with 7 percent, the Indonesia Petroleum and the Itochu companies–both Japanese-owned–with 6.5 percent each, South Korea’s Hyundai with 5 percent and Pakistan’s Crescent Group with 3.5 percent, with a possible minor stake held out for Russia’s Gazprom. Construction work was due to have begun by the end of 1998. The project encountered, however, serious political objections in the United States because of the excesses of the Taliban regime, with which the consortium had to negotiate. That phase of the project came to an end in August 1998 when the United States launched Tomahawk missiles against suspected terrorist camps in Afghanistan, in retaliation for bomb attacks on two U.S. embassies in Africa. UNOCAL withdrew from the project and has since disclaimed any immediate interest in reviving it.

At present, however, the United States as well as Turkmenistan and the interim Afghan government share a keen interest in it. For his part, Niazov favors extending the throughput capacity to 50 or 60 billion cubic meters annually. Turkmenistan can, with minimal investment, restore its 1990 production level of 90 billion cubic meters annually and–according to Niazov–raise it to 120 billion cubic meters from proven reserves alone. Almost all of that output would be available for export, virtually matching Russia’s current export levels. Turkmenistan’s export potential is even greater if its incompletely explored reserves are taken into account.

The project, if carried out, would break Russia’s near-monopoly on the transit of Turkmen gas. The consequences would be fourfold. First, Moscow could no longer place before Turkmenistan the alternatives of either selling its gas to Russia at artificially low prices or foregoing exports for lack of attractive outlets. Second, Moscow would lose the ability to boost Russia’s export revenues at Turkmenistan’s expense, by substituting cheap Turkmen gas for Russian gas in certain Russian regions in order to free corresponding volumes of Russian gas for export to lucrative international markets. Third, Moscow would be forced to make huge investments to develop its own gas fields in Arctic areas in order to sustain exports to Europe. And, fourth, Moscow would lose the political clout–on producer Turkmenistan as well as on consumer countries–that derives from Russia’s current quasi-monopoly on transit. These could be counted as “losses” to Russia from a proprietary perspective on Turkmen gas, but not if Turkmenistan’s independence is accepted as irreversible (Turkmen State News Service, Neytralniy Turkmenistan, Bakhtar news agency (Kabul), Western news agencies, March 7-8; see the Monitor, January 15, 24).

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