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Trans-Afghan Pipeline: Will Ambitions Convert into the Reality? PDF Print E-mail
by Rovshan Ibrahimov for Turkish Weekly
In mid-April, Turkmenistan, Afghanistan, Pakistan and India were decided on the construction of pipeline to export natural gas from Turkmenistan to these states. It should be noted that idea itself of the construction of the pipeline is not new. Firstly it was heard in 1993 and supported by the United States, which after the collapse of the Soviet Union pursued a policy to enhance its influence in the region. In 1995, between the government of Turkmenistan and the American oil company Unocal, as well as Saudi Arabian company Delta Oil had signed an agreement on the construction of this pipeline. However, while this project was frozen like Trans Caspian gas pipeline project, which is also planned with the aim of exporting Turkmen gas in a western direction.

 

The length of the Trans-Afghan pipeline will be 1680 km, 170 km of which will be held on the territory of Turkmenistan, 830 km on Afghanistan, and 400 km on Pakistan. The capacity of this pipeline will be about 30 billion cubic meters of gas per year. The price of this pipeline on data from the various sources ranging between 4 and 8 billion dollars, but during the construction process it may be higher because of some technical difficulties, which will later, and due to reducing of the dollar rate against other world currencies. At first, gas will come from Dovletabad explored deposits, whose reserves are estimated at 1.5-4.5 trillion cubic meters of gas. However, more accurate data on stocks on this gas field is not available.  

 

The revival of this project was possible only in 2008. The reason stems in changes of circumstances, directly or indirectly related to the development of the project. In 2006 India also offered to join the project.

 

Lately, on April 5, 2008, India and TurkmenistanIndia will produce natural gas in Turkmenistan, which in turn will be transported with Trans-Afghan pipeline to Pakistan and India. This fact has also served as a trigger for talks on the resumption of construction of the pipeline. signed a memorandum of understanding on cooperation in the field of oil and gas. According to the memorandum, however, no doubt that one of the main reasons, which plays role in the reviving of pipeline project, was a sharp increase in the cost of gas. Thus, the price of natural gas to European countries rose to 300 dollars. This is 10 times higher than price paid by Russia to TurkmenistanRussia pays 130 dollars per thousand cubic meters for Turkmen gas and since the beginning of 2009 this price may no longer be below 210 dollars. In this case, Turkmenistan in the presence of such prices is interested to increase production of own hydrocarbons in order to obtain higher returns. in 1993.

 

Nowadays another reason for the Trans-Afghan pipeline project has once again become topical, is the desire to gain support for the future price of gas at the desired level. In addition, one of the conditions of the Turkmen government was that the price of natural gas which will be transported through the Trans-Afghan pipeline will not be lower than 300 dollars per thousand cubic meters. Turkmenistan, putting forward proposals for the construction of new pipelines, also hopes to establish alternative routes for exports thereby receiving a lever to balance the prices of its main commodity.

 

An important factor in the resuscitation of the project has been the change of power in Turkmenistan itself, where, the death of President Niyazov after which Berdymuhamedov became a president, who became actively pursue energy policy.

 

However, despite the intentions of the parties, a new attempt has every chance to fail. This can be happen due to several reasons. First of all, it is worth noting that the pipeline should be laid on one of the most volatile parts of the world. After the military operation conducted by the coalition led by the United States in Afghanistan against the Taliban, the current leadership of country has still not been able to extend own authority throughout Afghanistan.

 

Comparative order in the country managed to retain only by the presence of coalition forces. Despite the fact that President Karzai announced that soon order in the country would be secured by the Afghan army, it is still hardly believed. Without the presence of coalition forces, Afghanistan will not be able to maintain stability inside the country on its own for a long time. The paradox in this situation and that one of the main sources of instability and disorder in the country is the presence of coalition forces. However, their full withdrawal does not augur well. The extra proof of that is the assassination attempt towards President Karzai, during a military parade, held on the occasion of 16th anniversary of the falling of the regime of President Najibullah. Responsibility for the assassination attempt had assumed by "Taliban" and "Islamic Party of Afghanistan". Security service has not behaved in the best way, which was unable to prevent the assassination attempt on time and as a result, 11 people were injured.

 

This is not the only reason for instability in the region. The strained relations between Pakistan and India still exist because of the disputed territory of Kashmir, which sometimes go into armed clashes between the two nations. In 1949, as a result of military conflict between India and Pakistan on Kashmir was divided between the two countries. This division persists today. Conflict situations around the cause of Kashmir brought to the Indo-Pakistan war in 1965 and Kargil conflict in 1999. The situation around Kashmir retains its tension to this day. In this case, any confrontation between the sides could keep the project in jeopardy.

 

In addition, unstable situation existed in Pakistan itself, where in the end of the December 2007 the former Prime Minister Benazir Bhutto was assassinated. Beluchistan province of Pakistan, from where the pipeline should take place, is only under nominal government control the country. The truth master of the situation here are Pakistani Taliban.

 

In addition to the problems of political nature, there are a number of technical difficulties. In particular, some 400 km pipeline will be held on mountainous terrain that will complicate construction, and subsequent control over the pipeline, especially in the winter seasons. In addition, in Afghanistan could complicate the transportation of pipes because of the lack of a railway that will also lead to costs of works. Still is question about source of financing for the project. None of the known financial institutions will agree to invest capital in such a costly and risky project.

 

But the greatest problem could be that even after the construction of a pipeline from Turkmenistan could simply not have the necessary amount of natural gas for export in this direction. It is not a secret that virtually the entire export gas, which is about 50 billion cubic meters of gas sold by Russia. Moreover, Russia wants to increase imports from Turkmenistan. In addition, Turkmenistan signed a treaty on its gas deliveries to China and Iran, and also promised to export a certain amount of gas in a westerly direction to the European Union.

 

Turkmenistan currently produces 60 billion cubic meters of gas, and if in the short term fails to drastically increase gas production, it will serve as the main reason that the draft would remain on paper.

 

Rovshan Ibrahimov, PhD.

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This commentary is from USAK's Energy Review Newsletter
http://www.turkishweekly.net/energy
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