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Central
Asian Leaders Sign Agreement To Conduct Gas Pipeline Feasibility
Study
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From left: Afghanistan's Karzai, Pakistan’s Musharraf and Turkmenistan's Niyazov |
Report By Asif Farooqi,
IOL Pakistan Correspondent
ISLAMABAD,
June 1 (IslamOnline) - The leaders of Pakistan, Turkmenistan and
Afghanistan signed an agreement in Islamabad Thursday, May 30, to
conduct a feasibility study for building a 1460-km natural gas
regional pipeline, amid fears that the project may take much longer to
materialize than stipulated by the concerned officials.
The
agreement was signed by Turkmenistan President Saparmurat Niyazov,
Afghan interim head Hamid Karzai and Pakistan President Gen. Pervez
Musharraf.
The
three countries will separately explore room for a second pipeline to
transport crude oil from Turkmenistan to Pakistan through Afghanistan,
a government official said. The proposed pipeline would supply natural
gas from Turkmenistan's huge Dauletabad-Donmez field, with over 100
trillion cubic feet in gas reserves to Afghanistan and Pakistan's
coastal Gwadar area, where Islamabad is building the country's third
port which will also have an industry to convert the Turkmen gas into
Liquefied Natural Gas (LNG).
A
senior Petroleum Ministry official in Islamabad told IslamOnline that
as a first step the three governments will hire an international
consultant to conduct a feasibility study of the project which could
take a year to complete.
"Basically
a feasibility study will be conducted by an international consultant
and this study could take a year before we move on to the stage where
a consortium is cobbled together," Abdullah Yousuf, Secretary
Pakistan's Petroleum Ministry, told IslamOnline.
“Physically,
the pipeline is not likely to be operational earlier than five
years”. He said the project had to start "from a scratch"
after a previous attempt was abandoned after the consortium leader
Unocal Corp. (UCL) withdrew due to uncertainty in Afghanistan.
The
project originally started in 1997, but was deadlocked when the U.S.
fired cruise missiles into Afghanistan in 1998 in pursuit of Osama bin
Laden, blamed for two U.S. embassy bombings in east Africa.
Most
of the analysts now believe that it will be extremely difficult to
find a financier for the project, as well as the contractors. U.S.
energy giant Unocal Corp. (UCL), a member of the defunct consortium,
has already said it has no plans to revive the Central Asia Gas
pipeline project.
Unocal
was considered the most favorite contractor for this mega project with
a lot of experience working in Afghanistan. The task of putting in
place a consortium becomes even harder with this important player
backing out of the project, an official in the Pakistani Ministry of
Petroleum and Natural Resources (P&NR), which represents Pakistani
interests in the pipeline said.
He
said despite political interest of many influential governments around
the globe, implementing this project is going to be extremely
difficult. “Professional companies with commercial interests are not
willing to invest in this pipeline despite assurances from their
respective governments” the official said.
He
added that his ministry has carried out analysis and survey of the
general impression of the prospect contractors about this project,
which was not very “encouraging”. The huge project is expected to
cost about $2 billion.
The
Pakistani government is perhaps the most interested partner in this
project. The country needs the natural gas because of its plans to
convert fuel-fired power plants to natural gas. Currently it produces
2.4 billion cubic feet a day against a domestic demand of 3.4 billion
cubic feet a day.
Afghan
interim administration, backed by the United States view this project
more in the backdrop of political stability and development of
Afghanistan. The landlocked Turkmenistan, on the other hand, would
have an outlet to the closest port for exports of its natural
resources to Europe and Fareast countries.
The
Turkmen-Afghan-Pakistan gas pipeline project is not the only option
the Pakistani government is working on for import of gas. “In case
of any setback to the project, we have two more options available”
the official said. The other two proposed projects are
Iran-Pakistan-India gas pipeline project, the Qatar-Pakistan
underwater gas pipeline project.
The
Iran-Pakistan-India pipeline project, which has been marred by
political problems with New Delhi, was the first option before the
government. But latest hostilities with India compelled Pakistan to
concentrate more on the Turkmen option. “Otherwise the Iranian
pipeline is more feasible and practical option for Pakistan” the
official with the P&NR ministry said. The Iran pipeline project
will terminate in India - the region's biggest energy market.
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