Sun, Dec 22, 2013 page14

• Turkmen gas line plan can make or break South Asia

  • By Guillaume Lavallie / AFP, KABUL
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  The risks are huge, but so are the potential rewards, as plans advance for a pipeline carrying natural gas from Central Asia to energy-hungry South Asia through the wilds of Afghanistan and Pakistan.

  Next year’s withdrawal of US-led troops from Afghanistan opens a new chapter in a gepolitical battle of alliances and rivalries that echoes the 19th-century “Great Game,” in which Britain and Russia vied for supremacy over the same territory.

  Stretching 1,700km from the gas fields of Turkmenistan to India’s quickly developing northwest, the pipeline is an ambitious infrastructure dream that could transform the region’s fortunes.

  

  A worker on Nov. 27 walks on top of a tanker wagon to check the freight level at an oil terminal on the outskirts of Calcutta, India.

  Photo: Reuters

  Pakistan and India are desperate to boost their energy supplies, and the pipeline also offers a lucrative opportunity for Afghanistan as international aid funding declines in the years to come.

  All three countries have signed contracts with Turkmenistan, which is believed to contain one-sixth of the world’s natural gas reserves deep underground.

  However, Turkmenistan, which was part of the Soviet Union until 1991, is an isolated autocracy and is proving a hard negotiating partner in the crucial months before the NATO military pullout is completed by the end of next year.

  “We always talk about Afghanistan as a bridge between Central and South Asia, and this would be the first example to be implemented and prove we can do regional integration,” Afghan Ministry of Mines Abdul policy director Jalil Jumriany said.

  The challenges are formidable and include not just strained regional ties and tough physical terrain, but also instability in remote areas where Kabul and Islamabad have little control.

  The route goes through the Taliban heartland of Kandahar Province in southern Afghanistan and then through the volatile Pakistani city of Quetta and the fringes of the Balochistan badlands, where separatists are fighting a low-level insurgency against government forces.

  “I bet we will not have security issues,” said Jumriany, as pressure increases for a peace deal with the Afghan Taliban, who are now fighting the Afghan National Army as much as they are US troops. “When we start the construction of this pipeline, it will be beneficial for everybody in the region.”

  Jumriany said Turkmenistan was now drawing up a shortlist of companies from which the three other countries could choose their preferred bidder.

  Werner Liepach, Pakistan country director for the Asian Development Bank, which is helping coordinate the scheme, struck an upbeat note this week, telling reporters that many arrangements had finally been worked out.

  “I am very confident that this pipeline will go forward and we expect the gas to flow [at the] latest in 2018,” he said.

  Yet it remains unclear who would agree to invest the US$7.6 billion needed to build the “TAPI” (Turkmenistan, Afghanistan, Pakistan, India) pipeline.

  Sources close to the project say US giants Chevron Corp and ExxonMobil Corp, Malaysia’s Petronas and British Gas Ltd have expressed interest, but their primary goal may be long-term access to Turkmen gas fields.

  “There is interest in the upstream [exploration and production]. There is no denial about it,” said Mobin Saulat, director of Inter State Gas Systems, the company commissioned to manage the Pakistani section of the TAPI. “The issue is not about the availability [of funds], but how much confidence the investors feel about these projects.”

  Highlighting the difficulties that beset cross-border pipelines is the troubled Iran-Pakistan project from the offshore gas field of South Pars to Karachi, Pakistan’s economic hub where power shortages are a daily crisis.

  Earlier this year, Iran finished its portion of the pipeline, but reports say it canceled a planned US$500 million loan to help build the Pakistan part, effectively scuppering a project that had been due to go into operation next year.

  Washington is also opposed to the US$7.5 billion, 1,800km Iran-Pakistan pipeline, with Tehran under heavy US sanctions.

  “It’s in their best interest to avoid any sanctionable activity,” a US Department of State spokesman said recently, referring to Pakistan’s involvement.

  For Didier Chaudet, a visiting fellow at the Islamabad Policy Research Institute, the TAPI dream is threatened by the India-Pakistan rivalry, politicking over the Turkmen gas fields and the risk of militant sabotage.

  “There seems to be a block over the question of foreign shares in Turkmen gas fields,” he said. “And what company would be strong enough to lead a coalition of Indian and Pakistani partners?”

  Chaudet also said that the Taliban may be persuaded to resist attacking the TAPI pipeline by its long-time supporters in Pakistan.

  Yet Indian strategic affairs expert Bharat Karnad said that any hopes the pipeline will soon surmount these difficulties were misplaced.

  “This project can be [considered] nullified until the conflicts in the region are resolved,” he said.
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