With Afghan Government In Place, Long-Stalled Pipeline Project Moves Forward

by Raouf Liwal

(IPS) KABUL -- Prospects for the trans-Afghan pipeline have advanced with the Asian Development Bank (ADB) indicating that it is set to launch a preliminary report on the $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 the U.S. oil and gas company, Unocal, and its Argentinean rival Bridas. Both had initially agreed to pay $300 million to Afghanistan per annum as a 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 no longer had any role in supporting the development or funding of this project. Bridas, too, had withdrawn from the project and analysts suggest this was due to security reasons.

But now, according to insiders, there are strong indications Unocal could be favored by Afghan officials in the government of President Hamid Karzai to return back to the development of the trans-Afghan pipeline venture -- though the company's role is not exactly clear in the ADB-led project.

Half of the 1800-kilometer-long pipeline will pass through Afghan territory to supply gas from Dawlatabad city of Turkmenistan to the 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.

ABD 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 and then the final results will be announced."

Oil analysts in the region say, whoever takes the project will clearly reap millions of dollars each year from the venture. But Afghanistan's security has been a major concern for the investors.

Mandokhil added that should India participate in the project, it will give more momentum to the regional business.

Gul Ahmad Kamali, head of the energy and road projects with ADB, said his organization's part in the pipeline project was to assess the facilities, provide technical advisors, and conduct surveys.

Turkmenistan, the world's biggest producer of gas, is desperate to get its huge gas reserves out to market and thereby boost up its weak economy by presenting its gas petroleum supplies to south and central Asian countries.

The trans-Afghanistan pipeline will first go to Gawadar Port of Pakistan and then to India and 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 at the seventh meeting in Islamabad how to ensure security for the pipeline in all the three countries and to specify the portion of India in this project.

Engineer Nazar Mohammad Mangal, the acting minister of mines and industry, said Afghanistan has got more of a chance 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), and Afghanistan joined SAE in this conference, so the windows of hope are open for us," Mangal said in an interview.

Salam Azemi, a former Unocal advisor, said the pipeline project was very important for Afghanistan in terms of economic and regional benefits and it will provide jobs for many Afghans.

Afrasyab Khattak, a Pakistan based regional analyst, said implementation of the project was for the benefit of both Afghanistan and Pakistan despite its past suspensions.

"Our region is very backward in economic development and if this project is implemented, it will benefit our nation tremendously, though, improper rivalry and some initial problems had impeded the business, but it's a good time to take advantage of this," Khattak said.

Azemi also said Bridas had started the primary survey of the project during the mujahideen government in the 1990s, but it suspended plans because of the lack of security.

Iran once tried to pass the pipeline from its territory, but soon failed because it was too expensive.

In 1995 it was thought that the former Pakistani president Benazir Bhutto, Pakistani politician Nasrullah Babar, the Taliban regime, and the Turkmen president Safar Murad Niazov, were on one side of the argument trying give the project to the Argentinean company Bridas.

On the other side were Saudi Arabia's Delta Oil, Robin Rafael, a senior official in the U.S. State Department, Prince Turki al-Faisal, the then-Saudi intelligence chief, Zalmai Khalilzad, South Asia advisor to the State Department, and moderate Taliban officials, supporting Unocal.

Correspondents say Pakistan, then under Bhutto, was under pressure from the United States to sign the pipeline construction agreement.

They also say the UN special representative to Afghanistan at that time, Mahmood Misteiry, and his deputy were both sacked from their jobs because the deputy was associated with Bridas.

During that period, Bridas attempted to take the project first but the American company, Unocal, a well-reputed oil and gas company with 108 years of history, won the bid. Unocal planned to train professional Afghans at the University of Nebraska to run this project.

By October 1997, Unocal established the Central Asian Gas Pipeline consortium to build the Turkmenistan-Pakistan segment of the pipeline at an estimated cost of two billion dollars ($2.7 billion if extended to India).

Construction was scheduled to begin as early as in 1998, but the ongoing civil war in Afghanistan obstructed any opportunities for financing the project.

After the U.S. air strikes in Afghanistan in August 1998, Unocal suspended its involvement in the pipeline and officially withdrew from the consortium towards the end of the year

The revised scheme, besides the $300 million annual income, should pave the way for extension of a railway alongside the pipeline, thousands of Afghans should find jobs, free gas should be distributed to the areas through which the pipeline is passing, and should ensure construction of electricity and road facilities in these areas.

Azemi says improvement of Pakistan-India relations and settlement of the Kashmir dispute should be ensured before the project comes into effect.

While there's talk of Unocal's return, some analysts have criticised the company for its "bad history."

Bashir Ahmad Ansari wrote in his book, 'Afghanistan in the Blaze of Oil', that Unocal has always been under public pressure over its 'inhumane policies'.

The strongest objection against the company was a 120-page protest letter by 30 U.S.- based organizations on Dec. 10, 1998, submitted to legal officials in California.

"Unocal's cooperation with the Taliban regime which was violating all human rights, especially women's rights, forced most women's organizations in the U.S. to make legal criticism against the company," wrote Ansari.

"Thereby, the oppressed Afghan nation became a victim of the black dinosaur of petroleum after being sacrificed by the Red Communism," added the author.

All the sides involved have been concerned about security in Afghanistan.

When, for instance, the former Soviet Union extended a small oil pipeline from the northern provinces to Kabul, it had holes in many areas and people were known to steal the oil as it ran freely to the ground.