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Those with pipelines call the tune Author: Siddharth Varadarajan
Article Text:
Almaty: If there is one issue which is the source of even greater
heartburn than the battle for control of the most lucrative oil fields of
Central Asia, it is the struggle to decide how the region's vast reserves
of energy will be transported out to the wider world. And as with most
things in the current global system, it is geopolitics - meaning the sheer
size of the military and political footprint of the United States - which
is in command, relegating economics and rationality to the background.
Kazakhstan lies in the centre of Asia and is much closer to the
energy-hungry markets of the continent such as China and India than to
Europe or North America. ``There are four routes through which we can
export our oil and gas'', says Kamal Burkhanov, head of the
Institute of Russia and China and an adviser to the President, Nursultan
Nazarbaev, on strategic affairs. ``First, a pipeline through Iran to the
Persian Gulf either via Turkmenistan or the Caspian Sea; second,
the Atasu pipeline to China; third, the Caspian Pipeline Consortium (CPC)
through Russia and its Black Sea port of Novorossisysk; and fourth, the
Baku-Tbilisi-Ceyhan (BTC) route'', where a pipeline is planned from
Azerbaijan to the Turkish Mediterranean coast.
``The Americans want Baku-Ceyhan and are using all their influence
in the region'', he says. ``And they are determined to ensure the Iran
route doesn't develop''. According to Mr. Burkhanov, there isn't enough
oil in the Caspian continental shelf to warrant investment in all routes,
though the Kazakh Government backs all four. ``In my view, there is no
doubt the most beneficial for Kazakhstan is the Iranian one, because the
royalty costs, at around $1 out of $10 are far lower than the $3-5 we
would pay through the CPC or BTC''. But though project work has begun for
the other three pipelines, there has been no investment in the Iran option
despite India and Japan supporting Teheran, at least in principle. Thus,
the Kazakhs today limit themselves to selling small quantities of oil
through Iran, mainly on a swap basis.
All this might change if the new resolve with which the External
Affairs Minister, Natwar Singh, says India wants to develop energy
relations with Kazakhstan and Central Asia is actualised quickly. The fact
is that despite the grandiose declarations of the Vajpayee Government,
Indian policy towards Central Asia and Iran remained hostage all these
years to the `strategic partnership' with Washington - which did not wish
to see New Delhi getting involved in the Iranian energy sector - and the
prolonged, self-defeating stand-off with Islamabad, which meant a pipeline
traversing Pakistani territory was considered taboo.
Today, the Manmohan Singh Government is working on the assumption
that an Iran-Pakistan-India pipeline can be a win-win project for all the
countries involved. With this change in mindset, the key to accessing
Central Asian oil and gas is also within its grasp, since
Kazakhstan, Turkmenistan and Iran all favour the construction of
pipelines from the Caspian region heading south. ``So far, the Indians
have lost out'', says Mr. Burkhanov, ``but with Japan supporting the
Iranian project, India should get involved''.
For Kazakh analysts, Indian engagement is not just good for
business but a vital element for strategic stability in Central Asia.
``Stability in our region is based on Russia in the north, the U.S. and
European Union in the West, China in the east and India in the south'',
says Bulat Sultanov of the Institute of World Economy and Policy. ``It is
thus very important for us to have close relations with India".
``The pipeline to China was once thought of as utopian'', he says.
``But it will be completed by December 2005. In the same way, why can't we
think of a fantastic project of a pipeline from Kazakhstan to India
through Turkmenistan, Afghanistan and Pakistan?''
In fact, there is already a trilateral agreement for the
Turkmen-Afghan-Pakistan (TAP) gas pipeline from Daulatabad in
Turkmenistan to Herat and then Multan. The projected cost is $2.5
billion and the capacity will be 70 billion cubic feet of gas per
annum. Adding India as a spur from Multan should not be difficult. What is
needed is for India to think boldly and develop big plans for its Asian
neighbourhood. In the energy business, delays can be costly. Last week,
even as India continues thinking about what its negotiating strategy with
Pakistan should be over the proposed Iran-India pipeline, China went and
signed a mammoth death for the purchase of Iranian liquefied natural
gas (LNG). The deal involves the annual purchase of 10 million
tonnes per year (75 million barrels) for 25 years. The total size of the
deal: $100 billion.
Copyright 2004. All Rights Reserved.
Record Number:
A20041101146-3CBA-AIW,0,XML,AIW | ||||
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