Originally Published 2003-09-29 12:00:48 Published on Sep 29, 2003
India has decided to adopt a wait and watch approach to the ongoing negotiations that aim to revive the trans-Afghan gas Pipeline (TAP) project. The proposed US$ 2.5 billion gas pipeline project is expected to transfer of 30 billion cubic meters of natural gas
India and the Trans-Afghan Gas pipeline
India has decided to adopt a wait and watch approach to the ongoing negotiations that aim to revive the trans-Afghan gas Pipeline (TAP) project. The proposed US$ 2.5 billion gas pipeline project is expected to transfer of 30 billion cubic meters of natural gas annually from the Dauletabad fields in southeast Turkmenistan to Pakistan, Afghanistan and possibly India.

In fact, this is not the first attempt at negotiating to build this 1600 kms. - long pipeline. As early as in 1992, the Argentinean oil company Bridas had won exploration rights in the Turkmen gas fields. But the new power equations that came about in Afghanistan caused by the unexpected arrival of the Taliban forced Bridas to change its strategy and renegotiate the deal with the Taliban leadership. This was also in the interests of the Pakistani establishment, which was close to the extremist outfit. However, the pipeline scene got murkier when in 1995 a consortium led by US-based oil giant UNOCAL and Saudi oil company Delta Oil started negotiating with the authorities in Turkmenistan for building contracts. Negotiations by these opposing camps with Taliban, governments in Turkmenistan and Pakistan and various warlords in Afghanistan went on till the Americans attacked Afghanistan and brought about a regime change. The most significant difference between the current negotiations and those went on prior to the fall of the Taliban is that this time the negotiating parties are countries themselves unlike last time when the Oil firms themselves were conducting the negotiations.

The current negotiations to construct the pipeline began in May 2002 when a Steering Committee comprising of the oil and gas ministers of Pakistan, Afghanistan and Turkmenistan was formed to oversee the project. The Asian Development Back (ADB) has been taking keen interest in the negotiations since the beginning and is involved in developing and processing the project. The ADB has also sanctioned one million dollar technical assistance grant to undertake a feasibility study for the project. The first phase of the feasibility study is over and the two subsequent phases are expected to take place soon.

While India has never taken great interest in becoming a party to the trans-Afghan pipeline project, it was always urged upon by the governments and private companies involved in the pipeline venture to participate in it. This time, after the Steering Committee of the project met in Manila on 9th April 2003, the oil and gas ministers of Pakistan, Afghanistan and Turkmenistan jointly requested India to participate in the pipeline venture. India has been asked to participate both as an investor and consumer.

Since Pakistan and Afghanistan are not sufficiently developed markets for Turkmen gas, and Afghanistan may develop its own gas fields for domestic use, India is the logical focal point of this pipeline venture although Pakistan's minister of Petroleum and Natural resources says that the "project would be viable without India's participation". Moreover, the international funding agencies may not be willing to make investments in the project if India's participation is not guaranteed in it. Though it is true that a large part of India's future energy needs may be met by participating in this pipeline, India needs to carefully consider its options before taking any final decision about it.

What are India's fears about participating in the trans-Afghan pipeline venture? Firstly, Indian government is apprehensive about the safe flow of gas to India through Pakistan. In fact, such a fear does not need much elaboration given the kind of relationship both the countries share. India does not want to give any chance to Pakistan to jeopardize its energy security. With very low amount of hydrocarbon resources in its Strategic Energy Reserve, India does not also want to be caught off guard in the event of an Indo-Pak conflict. Secondly, given the present political situation in Afghanistan, the safety of the pipeline cannot be taken for granted. The central government in Kabul does not have effective control in many regions of the country and the feuding warlords may see the pipeline as an opportunity to strengthen their hold in the area and to make some quick money. Analysts also say that Al-Qaida elements may still be active in the regions the pipeline would pass through.

Not so long ago the Indian government had abandoned plans to construct a pipeline through Pakistan to transfer gas from Iran due to security reasons. At least for three important reasons one would consider the abandoned Iran-Pakistan-India gas pipeline as qualitatively different from - and thus better than - the TAP project. First, in the proposed India-Iran pipeline there were three options to lay the pipeline i.e. through the Pakistani territory, through the shallow waters along the Pakistani maritime boundary or through the deep Arabian Sea water. On the other hand, in the TAP project, there is only one option, which is to lay the pipeline through the insecure territories of Pakistan and Afghanistan. Second, in the Iran-India pipeline venture India had the option of saying that it will only pay for the gas reached safely at its doorstep and would not invest financially in the project. Moreover, Iran was ready to reach gas to India by tankers in the event of any disruption in the flow of gas through Pakistan. This is not the case in the TAP project. Third, whereas the Iran-India pipeline would have only one potential threat, which is Pakistan, the TAP project, as mentioned earlier, has threats from at least three quarters - the Afghan warlords, Al-Qaida and Pakistan. If the Indian government was apprehensive about the security of the proposed Iran-India pipeline, there are even more reasons for India to be apprehensive about the trans-Afghan pipeline.

Though India meets more than half its energy needs by imports, it may not be wise to jump into the TAP project however lucrative it might look at first sight. It is wiser for India to wait and see what emerges from the high profile negotiations which are going on.
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