By Kaleem Omar

Washington has told Islamabad and New Delhi it would like to see the Iran-Pakistan-India gas pipeline project scrapped and replaced by a project to build a pipeline from gas fields in Turkmenistan

A report published in the latest issue of India Abroad, an influential Indo-American weekly newspaper, says the United States favours the building of a pipeline through Pakistan to supply gas to India but wants the pipeline to come from gas fields in Turkmenistan via Afghanistan rather than from gas fields in Iran.
Quoting diplomatic sources, the report said that Washington had conveyed its desire for the construction of the Turkmenistan-Afghanistan-Pakistan-India pipeline to India even before US Secretary of State Condoleezzaa Rice visited New Delhi earlier this month and told a news conference in the Indian capital that the Bush administration did not want India to buy gas from Iran.

The report said that the US was initially quiet on India’s efforts to buy gas from Iran because it wanted to remove New Delhi’s objections to a pipeline through Pakistan, and that once this was achieved, Washington began to push the alternative project: the pipeline from Turkmenistan.

"The Americans waited until the (Indian) cabinet decided to explore the possibility of the Iran project - which signalled that India was open to a pipeline through Pakistan - before registering their objections and reservations to the (Iran) deal," the report says.

The report said that with the US decision to push the Turkmenistan pipeline, "the Great Game for tapping the Central Asian oil and gas reserves has begun in right earnest once again." According to reports appearing in a section of the Pakistani press last week Condoleezza Rice had also informed Pakistani officials during her recent visit to Islamabad that the US would prefer that the Iran pipeline project be scrapped in favour of a pipeline from Turkmenistan.

The Pakistan government has yet to say publicly whether it has agreed to go along with Washington’s wishes in the matter or whether it will continue to push for a pipeline from Iran. The Indian government, too, needs to spell out its position clearly, though Indian Oil Minister Mani Shankar Ayar last week dismissed as "rubbish" recent media reports that had said that New Delhi had agreed to scrap the Iran pipeline project. At the same time, however, Indian oil ministry officials were quoted as saying that India’s decision to go ahead with the project would depend on the price of Iranian gas.

Earlier press reports, however, suggested that Islamabad and New Delhi intended to pursue both projects but planned to build the pipeline from Iran first and later extend the proposed regional energy network to include the pipeline from Turkmenistan.

Both governments need to spell out their respective positions in unambiguous terms. In the absence of firm statements by New Delhi and Islamabad, financing for the multibillion-dollar Iran pipeline project cannot be arranged.

As the world’s biggest consumer of commercial energy and one increasingly dependent on imports to meet its energy needs, the United States, for its part, has long sought to control an estimated $ 5 trillion of oil and gas resources from the Caspian Basin and the Republics of Central Asia.

According to World Bank figures, the United States uses 16 times more energy than India, even though India’s population is four times larger than that of the US. Thus, on a per capita basis, the US uses 64 times more energy than India. This makes it vital for the US to develop new sources of oil and gas, as a hedge against the day when Middle Eastern sources begin to run out.

Even otherwise, the US needs to develop new non-OPEC sources of oil to counter the stranglehold that OPEC producers currently have on oil prices and supplies. The US currently imports about 11 million barrels per day (bpd) of crude oil, or more than 50 per cent of its average consumption of 20 million barrels per day.

Saudi Arabia has kept its post as the largest supplier of crude oil to the American market. Saudi oil deliveries to the United States, currently average about 2 million bpd. Mexico is the second largest crude supplier to the United States, with deliveries averaging about 1.5 million bpd. Venezuelan deliveries to the US have fallen somewhat in the last two years, but Venezuela remains a big supplier of crude to the United States.
Central Asia has enormous quantities of undeveloped oil resources, including 6.6 trillion cubic metres of natural gas, waiting to be exploited. Afghanistan occupies a strategic position sandwiched between the Middle East, Central Asia and the South Asian subcontinent.

The former Soviet republics of Uzbekistan and Turkmenistan are the two major gas producers in Central Asia. Today, the only existing export-routes from the area lead through Russia. Investors in Caspian oil and gas are interested in building alternative pipelines to Turkey and Europe, and especially to the rapidly growing Asian markets.

India, Iran, Russia and Israel are working on a plan to supply oil and gas to south and south-east Asia through India, but continuing instability in Afghanistan is posing a great threat to this effort.

Afghanistan lies squarely between Turkmenistan, home to the world’s third-largest natural gas reserves, and the lucrative markets of the Indian subcontinent, China and Japan. A memorandum of understanding was signed in the 1990s to build a 900-mile natural gas pipeline from Turkmenistan to Pakistan via Afghanistan, but the civil war in Afghanistan had put the project on hold since 1997.

But a report published in October 2001, just after the US invasion of Afghanistan, said that American energy firms, through the US Overseas Private Investment Corporation (OPIC), were planning to reactivate the multibillion-dollar Turkmenistan-Pakistan gas pipeline project.

The report said that the doing away of US sanctions on Pakistan has cleared the way for OPIC and the US Eximbank to finance the Turkmenistan-Pakistan pipeline and other private sector projects in Pakistan.
The pipeline would carry gas from the Turkmen Dauletabad fields, among the world’s largest, to Multan in Pakistan, with a planned extension to India. The Eximbank is an independent US federal agency that assists in the financing of US goods and services to developing countries around the world through credit insurance, loan guarantees and direct loans. Depending upon the nature of the project, up to 85 per cent of US machinery and services costs can be financed by the bank.

UNOCAL, a leading US energy firm, led an international consortium of companies to build the Turkmenistan-Pakistan gas pipeline in 1997. The firm later pulled out of the project because of continued fighting in war-torn Afghanistan.

However, given what Condoleezza Rice said earlier this month in New Delhi about the US favouring the building of a pipeline from Turkemistan, UNOCAL and several other American firms are now likely to come forward to revive the project.

There is also a UNOCAL project to build a 1,030-mile oil pipeline called the Central Asian Oil Pipeline Project, which would start at Chardzhou in Turkmenistan and link Russia’s Siberian existing oilfield pipelines to Pakistan’s Arabian Sea coast. This line could transport 1 million barrels of oil per day from other areas of the former Soviet Union. It would run parallel to the gas pipeline route through Afghanistan and branch off in Pakistan to the oil terminal in Ras Malan.

Afghanistan was at the centre of the so-called "Great Game" in the 19th century when Imperial Russia and the British Empire in India vied for influence in the Central Asian region. Today, its geographical position as a potential route for oil and natural gas pipelines makes Afghanistan extremely important to energy companies seeking control of these precious resources.

Turkmenistan and Azerbaijan are reportedly closely allied to Israeli commercial interests and Israeli military intelligence. In Turkmenistan, a ‘former’ Israeli intelligence agent, Yousef A. Maiman, president of the Mehrav Group of Israel, is the official negotiator and policymaker responsible for developing the energy resources of Turkmenistan.

"This is the Great Game all over again," Maiman told the Wall Street Journal in an interview about his role in furthering the "geopolitical goals of both the US and Israel" in Central Asia. "We are doing what US and Israeli policy could not achieve. Controlling the transport route is controlling the product," he said.
"Those who control the oil routes out of Central Asia will impact all future direction and quantities of flow and the distribution of oil revenues from new production," said American energy expert James Dorian in the US Oil & Gas Journal on September 10, 2001 - only a day before the 9/11 attacks on the World Trade Centre and the Pentagon.

In keeping with Israeli political interests, Maiman’s planned pipelines bypass Iran and Russia. However, Maiman has said that he would have no objection to dealing with Iran, "when and if Israeli policy allows it."
Iran has accused the United States of trying to keep regional pipelines from passing through Iran. Creating a counterbalance to Iran’s regional influence was a cornerstone of the Clinton administration, which was concerned that Iran could gain too much control over Caspian Basin oil and gas exports.

"This is a common interest for the US and Israel," Dr Nimrod Novik, vice-president of Mehrav, was quoted as saying. "The primary interest is to prevent the development of Turkish strategic dependence on Iran, given the unique emerging strategic relationship between Turkey and Israel," he said.

Russia and Turkmenistan are engaged in fierce competition to conquer the Turkish gas market, and the supplier that offers the best price will emerge as the winner.

Maiman reportedly acted as the intermediary between Turkmenistan and the US firms, but won’t discuss his "cut" or whether his Merhav Group will receive a stake in the pipeline. The Merhav Group is said to have hired the Washington lobbying firm Cassidy & Associates and has reportedly spent several million dollars to "encourage" US officials to push for the trans-Caspian pipeline.

During the Clinton administration, Secretary of Energy Bill Richardson and "special adviser to the president" Richard Morningstar promoted the Baku-Ceyhan pipeline, calling it "critical to the economic survival of Turkmenistan."

The relationship between Israel, Turkey and the United States is the major factor for the selection of the Baku-Ceyhan route, which could be extended to bring oil directly to energy-deficient Israel. Energy experts, however, question the wisdom and expense of this route.