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South/Central Asia: Turkmen, Afghan, Pakistani Leaders Seek Revival Of Pipeline Project

The leaders of Pakistan, Turkmenistan, and Afghanistan met in Islamabad today to discuss a natural-gas pipeline project that could bring profits to all concerned. The project is an old idea but experts say the departure of Afghanistan's Taliban movement from the regional political scene makes the plan much more feasible.

Prague, 30 May 2002 (RFE/RL) -- The leaders of Pakistan, Afghanistan, and Turkmenistan gathered in Islamabad today where they agreed to consider reviving an old plan for constructing a natural-gas pipeline through their three countries.

The project potentially offers huge profits for all concerned and has only been neglected because of the previously unstable situation in Afghanistan, through which the pipeline must pass.

The will to see the project through is strong, but the amount of money required to fund it is not small: $2 billion to $3.5 billion for the gas pipeline alone. And the company that was initially selected to take charge of the project, America's Unocal, has shown no interest in participating this time.

The host of today's meeting, Pakistani leader Pervez Musharraf, discussed with Afghan interim government leader Hamid Karzai and Turkmen President Saparmurat Niyazov the possibilities of reviving the gas-pipeline project and building an oil pipeline.

The gas project would require construction of a 1,460-kilometer-long pipeline stretching from Turkmenistan's western Dauletabad field to the Pakistani city of Multan. The proposed oil pipeline would run from Turkmenistan to the Pakistani port city of Gwadar on the Arabian Sea coast.

Niyazov, the only leader of the three in power when the gas pipeline was first proposed, reminded reporters today that the plan is not new. "The project was basically started five years ago, when the American company Unocal, with several other companies, examined the route and the sources of gas in Turkmenistan and the final destination point in Pakistan and made a technical and economic assessment of the project," Niyazov said.

The three agreed to a feasibility study to seek financing for the project.

The potential gain for all three is undeniable. Turkmenistan has long wanted to export its hydrocarbon resources but is hampered by a lack of export routes. Afghanistan, as the transit country, would profit from the pipeline traveling through its territory. Pakistan would gain an additional source of energy and could also possibly export any surplus to eastern Asia.

Musharraf spoke about that at the press conference today, saying the pipeline could bring Central Asia's hydrocarbon resources to the Far East, Japan and the West.

Turkmenistan reportedly could ship about 15 billion cubic meters of natural gas annually, which could later be increased to 20 billion to 30 billion cubic meters. The country generally asks for $40-$42 per 1,000 cubic meters of its gas, and prevailing world prices are higher.

If past experience is any example, selecting who would head efforts to construct the project may be more difficult than agreeing on the need for the pipeline.

The first company to propose the idea was Argentina's Bridas. Niyazov later had second thoughts about Bridas and signed deals with Unocal and a Saudi Arabian company, Delta. A bitter battle erupted in international court between the two, with Unocal emerging victorious.

It was a short-lived victory. Following the U.S. cruise-missile attack on terrorist camps in Afghanistan in 1998, Unocal announced it was pulling out of the deal. The chaos in Afghanistan since 1998 effectively ended any hope of realizing the project.

With at least a semblance of stability present in Afghanistan and hopes for an improvement in the political situation, the project appears to be back on track.

While Unocal is out of the running, Bridas and Russia's Gazprom and Itera are said to be interested.