fwd: PIPELINES OR PIPE DREAMS?

This is another article indicating the race to develop an infrastructure linking
various parts of Greater Central Asia. RLC

Please see my "concerns" page:
http://artsci.wustl.edu/~canfrobt/Concerns
My blog: http://rcanfield.blogspot.com/

Forwarded Message:
--
From: Rasul Mobin
To: afghaniyat@yahoogroups.com
Subject: PIPELINES OR PIPE DREAMS?
Date: Feb 27, 2005
--

>
>
> RADIO FREE EUROPE/RADIO LIBERTY, PRAGUE, CZECH REPUBLIC
> ________________________________________________________
> RFE/RL Afghanistan Report
> Vol. 4, No. 7, 25 February 2005
>
>
>
> SPECIAL FEATURES
>
> PIPELINES OR PIPE DREAMS?
>
> By Amin Tarzi and Daniel Kimmage
>
> The on-again, off-again prospects of the
> Turkmenistan-Afghanistan-Pakistan Natural-Gas Pipeline Project (TAP)
> have come alive once more with a recent decision by India's
> cabinet to authorize discussion of three pipeline routes to India,
> including TAP. Without the Indian market, TAP was not deemed a
> profitable undertaking. But even if New Delhi and Islamabad come to a
> full agreement on the project, and Kabul's enthusiasm remains at
> current levels, a multitude of other problems could render the
> pipeline no more than a pipe dream.
> First envisaged in 1991, TAP is designed to transport natural
> gas from the Dawlatabad fields in Turkmenistan through Afghanistan
> into Pakistan and eventually to India. The initial phase of the
> project, excluding the pipeline's possible extension to India,
> would involve the construction of a pipeline about 1,700 kilometers
> in length, mostly through Afghan territory, that can transport up to
> 20 billion cubic meters of natural gas annually.
> The Asian Development Bank (ADB), which has financed a
> feasibility study for the project, has estimated that the
> Turkmenistan-to-Pakistan section of the pipeline would cost between
> $2 billion-$2.5 billion and would require four years of construction
> after all decisions are taken by the cooperating countries and
> international financial institutions (see "RFE/RL Afghanistan
> Report," 27 February 2003).
> According to a 14 February report by "International Oil
> Daily," ADB officials have confirmed that the TAP pipeline is
> "economically and financially a viable project." While Turkmenistan
> has yet to submit a certification of its Dawlatabad gas reserves, an
> unidentified ADB source quoted on 1 February by "Platts Energy
> Economist" said that the Turkmen side is expected to deliver the
> needed certification by March.
>
> India's Geostrategic Fears
>
> On the receiving end, India's reluctance to rely on gas
> from a pipeline crossing the territory of archrival Pakistan had
> proved to be a major stumbling block. However, the recent
> authorization given by Indian Prime Minister Manmohan Singh for his
> country to explore several possibilities to transport much-needed
> natural gas to India has rekindled interest in the TAP project.
> Indian Petroleum Minister Mani Shankar Aiyar told reporters
> in January that by looking at the region's map "you may accuse me
> of dreaming, but as a minister I am paid to dream." Aiyar added, "We
> have the Bangladesh-Burma [Myanmar] pipeline, we are looking at a
> pipeline from Iran that would cross Pakistan, and we want a pipeline
> from Turkmenistan that would cross Afghanistan and Pakistan," "Platts
> Energy Economist" reported on 1 February.
> Afghan President Hamid Karzai, whose country is eager to get
> the TAP project under way, told visiting Indian External Affairs
> Minister Kunwar Natwar Singh on 15 February that his country hopes
> New Delhi will look favorably at the trans-Afghan pipeline. A press
> release from Karzai's office indicated that pipeline would bring
> "significant economic benefit to Afghanistan and the region."
> But before Karzai and his Indian and Pakistani partners begin
> to celebrate economic prosperity and a constructive new phase in the
> elusive New Delhi-Islamabad partnership, several stumbling blocks
> need to be cleared.
>
> The Security Issue
>
> Afghanistan's security remains a major question,
> especially if the U.S.-led coalition forces and the NATO-led
> International Security Assistance Force begin to withdraw from that
> country. Beyond interim security, which could be provided by
> Provincial Reconstruction Teams under ISAF command, and perhaps air
> patrols by Afghanistan's future military partners, Kabul needs to
> extend its legal and physical authority throughout the pipeline
> route.
> Currently there are two routes under discussion. The first
> runs through northern Afghanistan, cutting through Kabul before
> entering Pakistan; the second travels through western Afghanistan,
> passing through Kandahar into Pakistan.
> Unfortunately, security concerns extend beyond Afghanistan.
> If the route through western Afghanistan emerges as the best option,
> the pipeline would cross Pakistan's Baluchistan Province. In
> January, a little-known separatist group attacked a gas-storage
> facility in Baluchistan. The attack was not unique, as local
> tribesmen increasingly are targeting natural-gas facilities in the
> province to settle accounts with the central government, ask for
> higher royalties, or promote their nationalist agendas.
> If the alternative option is chosen, the pipeline would cross
> the North West Frontier Province (NWFP) of Pakistan, which includes
> the semi-autonomous tribal areas. These regions, most notably the
> tribal areas, are known for their fierce independence. Both the NWFP
> and the adjoining Afghan border regions are also home to radical
> Islamists groups with very strong anti-India sentiments. A pipeline
> serving Indian interests would present them with a tempting target.
>
> Turkmenistan's Price Hikes
>
> Turkmenistan's relations with Russia are another variable
> in the complex equation that will determine the gas-rich Central
> Asian country's future deals. As RFE/RL has noted ("RFE/RL
> Central Asia Report," 2 December 2004), Turkmenistan has signed a
> 25-year "gradual increase" contract with state-controlled Russian gas
> company Gazprom under which Russia's purchases of Turkmen gas
> will rise from roughly 7 billion cubic meters in 2005 to 70
> billion-80 billion cubic meters by 2009.
> But the Russian-Turkmen relationship has been showing signs
> of strain lately. In early January, Turkmenistan strong-armed Ukraine
> into accepting a price hike, raising the price of gas from $44 per
> 1,000 cubic meters to $58. Fighting for similar gains on the Russian
> front, Turkmenistan shut off gas shipments to Russia in January.
> Gazprom head Aleksei Miller met with Turkmen President Saparmurat
> Niyazov in Ashgabat on 10 February, but their talks were
> inconclusive. Although Gazprom stated in a press release after the
> meeting that the two sides agreed to "follow existing agreements,"
> Turkmenistan's official news agency stressed that the current
> price -- $44 per 1,000 cubic meters, paid half in cash and half in
> kind -- is "unacceptable," Russia's "Vremya novostei" reported on
> 14 February. Further talks are expected.
> However Gazprom and Turkmenistan resolve the price dispute,
> the Turkmen government's desire to force the renegotiation of an
> existing contract, not to mention the hardball negotiating tactics
> implicit in the shutoff of gas shipments to Russia, are a cautionary
> lesson to other would-be partners. Moreover, Gazprom has its own
> concerns about Turkmenistan's gas reserves. As "Nefte Compass"
> reported on 20 January, Gazprom is waiting to see an audit of Turkmen
> gas reserves conducted by Texas-based DeGolyer and MacNoughton before
> investing in an upgrade of the Central Asia Center pipeline.
> Gazprom, which has contracted to buy large amounts of Turkmen
> gas to cover for declining yields at its existing fields against a
> backdrop of fearsome development costs for new fields in Siberia, is
> likely to take a dim view of any alternate export routes for
> Turkmenistan. State-controlled Gazprom provides a steady stream of
> revenues to the Russian budget, and the Kremlin can be expected to
> safeguard its interests. An anonymous oil-industry source told RBC on
> 18 January that the Russian gas company Itera, which at one point
> considered involvement in TAP, might have disassociated itself from
> the project because it "was not supported by Russian authorities."
> India, now drawing attention with its interest in TAP, may
> also be looking to expand its ties with the Russian energy sector,
> and specifically Gazprom. Indian Petroleum Minister Mani Shankar
> Aiyar is expected in Moscow on 21 February for talks that will focus
> on a possible agreement between India's Oil and Natural Gas Corp.
> (ONGC) and Gazprom to cooperate on natural-gas extraction projects in
> both Russia and India, Reuters reported. ONGC has also been
> conducting talks about the possibility of acquiring a stake in
> Yuganskneftegaz, the Yukos production asset state-owned Rosneft
> recently plucked from the ruins of erstwhile oil oligarch Mikhail
> Khodorkovskii's empire. Should India cement its links to big
> state-owned players in Russia's energy industry, Moscow could
> increase its leverage over a potential TAP participant, rendering the
> dream of riches for Kabul and peace and energy for New Delhi and
> Islamabad a mere pipe dream.
>
>
>
>
>
>
>
>
>
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