Since the death of Turkmen President Saparmurat Niyazov in December 2006, global energy firms have been racing to Ashgabat and the feeding frenzy has both spawned and revived numerous pipeline projects. Among the moribund initiatives is the Trans-Afghan Pipeline, at once the most potentially lucrative and ephemeral of the grandiose visions being promoted. TAP is the perfect epitome of a project where reveries of riches trump geography and political reality, as it would pass through some of the world's most turbulent landscape en route to the dynamic Indian energy market.
What is not at issue is the immensity of Turkmenistan's natural gas reserves, estimated to be the fourth largest in the world, after Russia, the United States and Iran. Extrapolating from Soviet geological data, analysts estimate Turkmen gas reserves at 10 trillion cubic meters to 14 tcm.
But ballpark estimates are not enough to attract massive foreign investment, and Niyazov's successor, President Gurbanguly Berdymukhamedov, has taken measures to define the country's hydrocarbon resources on Western terms. Six months ago he ordered Vice Prime Minister Tachberdy Tagiev to conduct an audit of the country's hydrocarbon deposits.
"Certifying oil and gas supplies in the country's fields will allow us to clarify our strategy for further developing the use of our hydrocarbon resources and account for the high goals set in the program of development of Turkmenistan's oil and gas industry through 2030 that would promote the development of the mutually beneficial international cooperation in the energy sector," he said.
British firm Gaffney, Cline & Associates Ltd. was hired to conduct Turkmenistan's first independent natural gas reserves audit.
TAP fits into Ashgabat's ambitious development plans; two months ago, TurkmenGaz Oil and Gas Institute Director Makhtumguly Khydyrov said Turkmenistan is seeking to boost annual gas output from its 80 billion cubic meters per annum to 130 billion bcm, which would require massive foreign investment. If geopolitical reality is ignored, then TAP could be a substantial component of such development.
As envisaged, TAP would have an annual carrying capacity of 33 bcm, cost $3.5 billion and stretch 1,050 miles, from Turkmenistan's Dauletabad gas field, through Afghanistan and Pakistan and terminate at the Indian town of Fazilka near the Indian-Pakistan border.
TAP has had a long genesis, beginning in March 1995, when Turkmenistan and Pakistan signed a memorandum of understanding. The following year, the MoU was embodied in the establishment of a consortium led by Unocal, the Central Asia Gas Pipeline Ltd., incorporated in October 1997 during signing ceremonies in Ashgabat.
The CentGas consortium had an impressive pedigree, incorporating besides Unocal, Saudi Arabia's Delta Oil, Russia's Gazprom, Turkmenistan's state Turkmenrusgas company, Japan's INPEX and Itochu, South Korea's Hyundai and Pakistan's Crescent Group. In December 1997 a Taliban delegation visited Unocal headquarters in Texas and the following month the Taliban signed off on the project. The year 1998 would subsequently prove problematic for the consortium however, as both Gazprom and Unocal withdrew from the project.
It is of interest that during this period Zalmay Khalilzad, now the U.S. representative to the United Nations, worked as Unocal's liaison to the Taliban. In an October 1996 Washington Post op-ed, Khalilzad urged the Clinton administration to deal with the Taliban, writing, "It is time for the United States to re-engage. … The Taliban does not practice the anti-U.S. style of fundamentalism practiced by Iran -- it is closer to the Saudi model."
In a fast-forward to 2008, nearly seven years after the November 2001 U.S.-led invasion that drove the Taliban from power, the Bush administration is considering augmenting the 34,000 troops it has deployed in Afghanistan, the most there since 2001.
Notwithstanding the military considerations, on April 27-29 Berdymukhamedov made a two-day official visit to Kabul. Following their meeting, the joint communique did not even mention TAP by name, but limited itself to stating the two governments would coordinate their efforts on attracting investment from international financial establishments and organizations for "similar projects."
What may in the end, however, kill TAP is not militant insurgency but Turkmen greed. Last week in Islamabad, during the tenth session of the Steering Committee for designing TAP, the Turkmen representative informed his colleagues of "corrections" to the project, that Ashgabat would sell its gas for the TAP pipeline based on its newly negotiated Central European prices with Gazprom. The result in Islamabad was sticker shock, as the Pakistani side quickly calculated that with transit costs factored in, Pakistan's final cost for 1,000 cubic meters of Turkmen gas would exceed $300.
Ashgabat's hardball capitalism hardly leaves it bereft of cash, as it already sells the majority of its output to Gazprom and Iran, while China is constructing a pipeline capable of transporting 30 bcm annually. Ironically, under Niyazov, Turkmenistan was the Taliban's major supplier of energy, and Afghan President Hamid Karzai's cash-starved administration was to receive 8 percent of TAP's transit fees. Turkmenistan's pricing tactics are yet another factor ensuring that Afghanistan's fiscal meltdown with its collateral unrest continues. Given that Turkmenistan shares a 500-mile porous border with Afghanistan, Ashgabat's fiscal decisions may eventually prove to be shortsighted if Afghanistan's turmoil cannot be subdued.
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