Gas piplines under shadow of the ‘Great Game’
THE ‘Great Game’ is on and the pipeline politics is heating up. The energy chessboard has been spread out and every move is being closely watched for its geo-strategic implications. And Pakistan is a stakeholder in this emerging battle of wits.
A deal to supply gas to energy-starved Afghanistan, Pakistan and India from landlocked Turkmenistan, through a 1,043-mile-long pipeline – TAPI – passing through war-torn Afghanistan into Pakistan and India was signed recently in Ashkabad.
At a capacity of 33 billion cubic meters of natural gas per year, the project would snake through troubled Herat and Kandahar provinces of Afghanistan into Pakistan and India.
However, interestingly President Gurbanguly Berdymukhammedov of Turkmenistan fired his minister for oil and gas on May 25, just two days after the signing of the TAPI agreement.
Citing the reasons for the sacking, the president’s office said Nedirov, oil and gas minister since August 2008, was dismissed “for serious shortcomings in his work.” This was an interesting development in the immediate aftermath of the signing of the agreement. Would there be more casualties, is anybody’s guess?
First visualised in early 1990s, TAPI has been a recurring dream. The security situation in Afghanistan made it impossible. And this interestingly idea is being pursued now, despite the fact that with NATO combat mission in Afghanistan about to close, things could deteriorate there further.
TAPI is also to pass through the restive Balochistan province. The pipeline route has been altered to pass through the relatively stable northern Pashtun regions of the province, yet sabotage cannot be ruled out altogether. Poorly guarded gas pipelines have been a favourite target of militants in Balochistan. But one has to concede here that despite the ongoing insurgency, gas supply from Balochistan has never been completely stalled for long. How anyone could build and expect to secure a natural gas pipeline through war-torn Afghanistan is a billion dollar question.
And on the geo-strategic altar is the Iran-Pakistan-India (IPI) gas pipeline. In June 2010, Iran and Pakistan signed a pipeline accord that would carry 21.5 million cubic meters per day of natural gas. Both countries hope to extend the pipeline into either India or China. This in itself would generate millions of dollars in transit fees to Pakistan. If this happens, Iran would gain an economic lifeline.
However, Washington does not seem ready to compromise on this project. Both IPI and TAPI are symbols of ‘New Great Game’ – being played out in the region.
The US and its allies want Pakistan to abdicate IPI and pursue TAPI alone. Interestingly New Delhi’s decision to move ahead on TAPI followed a visit to India by US Secretary of State Hillary Clinton.
Concerns about TAPI exist in India too. Bharat Karnad, a security analyst at the Centre for Policy Research in India, says:
“There are security concerns in Afghanistan and I don’t see who is going to ensure uninterrupted flow of gas through the pipeline. The US supports this project but they’re in the process of pulling out of Afghanistan.”
Air Commodore (retd) Khalid Iqbal, the former assistant chief of air staff of the Pakistan Air Force, too mentions the hurdles haunting the project. To start with, route security is an issue, since the pipeline will transit some 730 kilometres through Afghanistan.
Yet, another uncertainty is about sustainability of gas supplies from Turkmenistan. Questions exist if Turkmenistan will be able to meet its commitments for TAPI. Turkmenistan has already signed agreements with Iran and China to increase existing supplies to these markets; similar understanding has also been reached with the Gazprom. And now there are questions whether it will be able to meet its commitments for TAPI.
In addition, Turkmenistan’s gas sector suffers from several constraints, including lack of financial resources and technical capability to embark upon new, challenging projects. Some energy analysts are of the view that it’s unlikely that it will be able to increase its export volumes substantially over the next 10 years.
Financing the pipeline is also a major hurdle. Already, according to some estimates, the cost of the pipeline has crept to $12 billion from the original $7.6 billion. The issue indeed remains where’s the money?
The Asian Development Bank having called TAPI the ‘peace pipeline,’ has provided a few million dollars in technical assistance, but indeed much more is needed.
None of the four TAPI partners have yet pledged solid funding to build the pipeline. Some US officials have hinted that major energy companies might be interested in financing the project. But not everyone seems convinced. Indeed few pragmatic investors would be eager to finance a pipeline going through an unstable Afghanistan.
The issue of gas pricing is also important. It is likely to be around 80 per cent of oil price. And gas prices would eventually track the volatile crude markets, adding another uncertainty to the economy.
However, TAPI definitely provides a chip to Islamabad while bargaining the cost of gas with Tehran. The project could only go ahead if Pakistan and India determine that the price benefits outweigh their investment.
The retired Air Commodore then underlines that TAPI provides a cover for Americans to maintain a potent military presence in Afghanistan, though for other strategic reasons. The prospect of building the pipeline under armed guard and then defending it for decades remains a formidable challenge, in terms of both manpower and cost. How many NATO countries would be willing to make long-term commitments to support pipeline security in Afghanistan?
In June 2008, Canadian Centre for Policy Alternatives argued: Are the Afghan people willing to have foreign troops in their country in perpetuity? As a noted Canadian Claude Castonguay, observed: “No society changes because of an outside pressure, and certainly not by force of arms.”
Indeed, the overriding American objective to promote TAPI is plain and simple; to ensure that the IPI is effectively killed. The United States sees TAPI as an opportunity to give a knockout punch to Tehran.
However, some analysts underline that TAPI’s biggest benefit is its ability to create a regional vested interest in Afghanistan’s security. By shifting some of Afghanistan’s security burden to Pakistan, India and other regional players, the US can further reduce its role in Afghanistan. Already there have been hints that India may be entrusted with the task of providing security in certain parts of Afghanistan. Would that be acceptable to all the players?