As for the market, the big question has been: should the pipelines flow east or west? The western route would be easier, as much of the infrastructure is already in place. There are several projects underway or completed for bringing energy resources to the west. However, European oil demand over the next 10 to 15 years is expected to grow by only one million bbl/d, while Asian demand is expected to grow by at least 10 million bbl/d over the same period. Therefore, greater profit is seen in piping these resources to the east.
Unfortunately, an eastward route would require the longest pipelines in the world. Formidable mountains would require long detours to the north, or a shorter route to the south through either Iran or Afghanistan and Pakistan. The Iranian route is prohibited under the Iran and Libya Sanctions Act. Therefore, Afghanistan and Pakistan are the choice for energy flowing eastward. (See source 4)
The Trans-Afghanistan Pipeline
Efforts to revive the trans-Afghanistan pipeline began soon after the U.S. incursion into that country. The pipeline from Turkmenistan to Pakistan was first discussed in the late-1990s, with a consortium led by Unocal pushing the project. Unocal backed out in 1998 after international financial institutions refused to help cover the cost of the project so long as Afghanistan was racked by armed conflict. (See source 5)
As reported by the Asia Times, in July 2001 a strategy to topple the Taliban and replace it with a Òbroad-based government,Ó was discussed during the G8 summit in Genoa, Italy. (This subject was first broached in Geneva at a May 2001 meeting between the U.S. State Department, Iran, Germany, and Italy.) Following within days of the G8 summit, secret negotiations were conducted in a Berlin hotel between American, Russian, German and Pakistani officials. Pipelineistan was the central topic of these negotiations, and a plan was set up for military strikes against the Taliban from bases in Tajikistan to be launched before mid-October 2001. (See source 6)
Soon after the invasion began in October, the pipeline project was discussed in Islamabad between Pakistani Petroleum Minister Usman Aminuddin and American Ambassador Wendy Chamberlain. Subsequently, during a visit to Ashgabat, Turkmenistan on Jan. 31, Deputy Secretary of State Elizabeth Jones told Turkmen President Saparmurat Niyazov that Washington would support such pipeline projects so long as they were commercially viable. (See source 7)
In April Niyazov called for the United Nations to support a plan to build a gas pipeline linking Turkmenistan to Pakistan, reported EurasiaNet. The project was being touted for bringing stability to Afghanistan. Support from the UN would boost the status of the project and clear the way for guarantees from international institutions like the UN Development Program. (See source 8) Also in April as reported by Agence France-Presse, World Bank chief James Wolfensohn said he had held talks about financing the Trans-Afghanistan gas pipeline. Wolfensohn, during a visit to the Afghanistan capital, Kabul, stated that a number of companies had already expressed interest in the project. (See source 9)
So far, no corporations have been named as firmly signing on to the project. Several sources have stated that Unocal will likely come forward again to join in the project, according to the DAWN Group of Newspapers. (See source 10) Most notably, Afghan Minister for Mines and Industries Mohammad Alim Reza has stated that Unocal was still in the lead attempting to win the $2 billion trans-Afghanistan pipeline. (See source 11) According to NewsBase, Unocal followed this announcement with a statement that it has no intention of reviving the Central Asia Gas Pipeline (CentGas) project. (See source 12) However, Unocal has made no statement contradicting reports that it has a project to build the Central Asian oil pipeline, linking Turkmenistan both to RussiaÕs existing Siberian oil pipelines and to the Pakistani coast. This oil pipeline will run parallel to the proposed gas pipeline route through Afghanistan, reported the Asia Times. (See source 13) It is possible that UnocalÕs denial of interest in the gas pipeline could just be for public consumption. Prior to stepping down from the CentGas project, Unocal was targeted by human rights groups for its dealings with the Taliban.
Energy experts have indicated that companies owned or formerly managed by Bush senior and Vice President Dick Cheney are showing a keen interest in Caspian Sea reserves, the DAWN Group reported. (See source 14) And the U.S. is expecting investment from U.S.-based energy conglomerates through Overseas Private Investment Corporation (OPIC) to resuscitate the Afghan pipeline project. (See source 15) It has been noted that despite assurances from Afghan and Pakistani leaders, continued volatility in the region is deterring energy corporations from offering to help build the pipeline. It is suggested that it may take several years of political stability before the project could be seriously revived. However, the Asian Development Bank (ADB) is also keenly interested in the project. ADB loans will likely be used to cover part of the cost of building the gas transport system, with funds from donor countries for the reconstruction of Afghanistan covering the rest, according to the BBC and NewsBase. (See sources 16 and 17) It will be interesting to see what role Halliburton, formerly chaired by Cheney, plays in the pipeline construction.
On May 30 AfghanistanÕs interim leader, Hamid Karzai, TurkmenistanÕs President Niyazov, and Pakistani President Pervez Musharraf met in Islamabad to sign a memorandum of understanding on the trans-Afghanistan pipeline project. As a first step, the three countries will begin work on a feasibility study. A preliminary assessment will be issued in late-September and the three leaders will meet for more talks on the project in October, reported NewsBase. (See source 18) The Turkmen-Afghan-Pakistani gas pipeline accord has been published and can be viewed at the following website:ááá
<http://www.gasandoil.com/goc/news/nts22622.htm>.
Caspian Oil Estimate Revised Down
Early estimates of Caspian Sea oil reserves ranged from 115 billion to 200 billion barrels. These estimates have been rightfully viewed with scepticism as they were based on a 10 percent probability of recovery -- that is, they were considering oil that could not be recovered. Now this assessment has been severely downgraded by oil industry insiders.
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