“Renewed Hope for Afghan Pipeline”

That’s the headline from today’s Asia Times, essential reading for South and Central Asia watchers.

Some highlights:

Renewed hope for Afghan pipeline

By Raouf Liwal

KABUL – Prospects for the trans-Afghan pipeline seem good, with the Asian Development Bank (ADB) indicating that it is set to launch a preliminary report on the US$2 billion project linking the vast gas field in Turkmenistan to Pakistan, through Afghanistan.

The earlier contenders for the project, first mooted in the 1990s, were US oil and gas company Unocal and its Argentinean rival Bridas. Both had initially agreed to pay $300 million to Afghanistan per annum as premium for using the land. But in December 1998, Unocal said it was withdrawing from the Central Asia Gas (CentGas) pipeline consortium for business reasons and would no longer have any role in supporting the development or funding of this project. Bridas, too, withdrew from the project, analysts suggest for security reasons. But now, according to insiders, there are strong indications that Unocal could be favored by Afghan officials to return to the venture, though the company’s role is not exactly clear in the ADB-led project.

Half of the 1,800-kilometer pipeline will pass through Afghan territory to supply gas from the Dawlatabad city of Turkmenistan to Gawadar Port of Pakistan. The trans-Afghan pipeline has been one of the most controversial issues among Western politicians, investors and major world gas companies, including Unocal and Bridas, since 1995.

ADB officials say the primary plan of the project will soon be released. Engineer Mandokhil, an advisor to the mines and industries ministry, told Pajhwok Afghan News: “ADB’s technical and economic study will be completed and the three countries involved in the project – Afghanistan, Pakistan and Turkmenistan – will hold a meeting in Islamabad at the end of November. The final results will be announced then.” Gul Ahmad Kamali, head of the energy and road projects with the ADB, said his organization’s part in the pipeline project was to assess the facilities, provide technical advisors, and conduct surveys.

Oil analysts in the region say whoever takes the project will reap millions of dollars each year from the venture. But Afghanistan’s security has been a major concern for investors. Mandokhil added that should India participate in the project, it will give more momentum to regional business.

Turkmenistan, the world’s biggest producer of gas, is desperate to get its huge gas reserves out to the market and boost its weak economy by presenting its energy supplies to South and Central Asian countries. The trans-Afghanistan pipeline will first go to Pakistan’s Gawadar Port of Pakistan and then to India. The gas will then be transferred to Bangkok through ships.

Hakim Taniwal, the former mines and industries minister, now minister of employment and social affairs, told Pajhwok that the three partners discussed the pipeline’s security at the seventh meeting in Islamabad, as well as India’s role in the project.

Engineer Nazar Mohammad Mangal, acting minister of mines and industry, said the pipeline would give Afghanistan the opportunity to get involved in regional development and economic projects. “I’ve just returned from India, where I attended a conference of South Asian Energy [SAE]. Afghanistan joined SAE in this conference, so the windows of hope are open for us,” Mangal said.

Salam Azemi, a former Unocal advisor, said the project was very important for Afghanistan in terms of economic and regional benefits and would provide jobs for many Afghans. Afrasyab Khattak, a Pakistan-based regional analyst, said the project would benefit both Afghanistan and Pakistan, despite past hiccups. “Our region is very backward in economic development. This project will benefit our nation tremendously. Though improper rivalry and some initial problems had impeded the business, it’s a good time to seize the initiative,” Khattak said.

The revised scheme, apart from the $300 million annual income, should pave the way for extension of a railway alongside the pipeline, provide jobs to thousands of Afghans, distribute free gas to the areas through which the pipeline passes, and should ensure construction of electricity and road facilities in these areas. Azemi says Pakistan-India relations should improve and the Kashmir dispute settled before the project comes into effect.