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Investors willing to support project for pipeline from Central Asia to Pakistan
By Nadeem Malik
ISLAMABAD: US trade and investment delegation shows willingness to support oil and gas pipeline projects from Central Asia to Pakistan, once a political decision is made.
In a joint press conference of the US EXIM Bank, Overseas Private Insurance Corporation (OPIC) and Trade and Development Agency (TDA), US officials said that pipeline projects were being considered at the highest policy level by the respective governments. "Once they took a decision, and potential investors come forward, we'll sit down and discuss the financing issues."
The joint delegation was represented by Eduardo Aguirre, Vice Chairman and First Vice President of the EXIM Bank, Ross Connelly, Executive Vice President and Chief Operating Officer of the OPIC, and Carl B. Kress, Chief of Staff of the TDA. All three hold number two positions in the hierarchy of their institutions.
The diversification of energy requirements, less reliance on petroleum imports from the Arab world, and exploitation of the Central Asian and Caspian reserves had always been a dream for the United States. In the mid-90s, leading US company UNOCAL was courting Taliban regime to lay 1600 kilometer long Trans-Caspian gas pipeline from Daulatabad, Turkmenistan to Multan, Pakistan.
A consortium led by UNOCAL, including, Delta of Saudi Arabia, Itochu of Japan, Gazprom of Russia, Inpex of Japan, Hyundai of South Korea and Crescent of Pakistan even discussed the modalities and financing arrangement for this $2.5 billion project.
The Centgas (Central Asia Gas) project was supposed to pump 700 billion cubic feet (BCF) gas per year through 870 miles long pipes network to Pakistan, and another 400 miles to India. Another part of this project was crude oil export pipeline from Chardzhou, Turkmenistan, via Afghanistan to a terminal on the Pakistani Arabian Sea coast, with a capacity of one million barrel per day. Similarly, an oil pipeline from Kazakhstan to Gwadar, Pakistan was also proposed.
However, later on difficulties with the Taliban regime fizzled out the investment interest. This had, however, been revived with the induction of new interim set-up in Afghanistan, and with US intentions to maintain strategic presence in the region, its prospects had brightened further.
US officials maintained that the project would need to be re-analysed, and the agencies would be willing to consider financing for the export of goods and services at that final stage. The main political issue at the policy level being perceived by various stakeholders was how much concession they had to concede in return for such a mega project that would definitely have far reaching economic gains for the region as a whole. US officials appreciated very momentous choices that Pakistan faced, and the decisions that it made, saying that Pakistan had played tremendously significant role in the region as a friend of the United States. They said the visit of the joint investment team was a follow up of US President George W Bush's commitment to forge strong economic ties between the two countries.
US team announced financing plan for the privatisation of oil and gas sector. They also indicated new investment for two new projects in the power sector, one in the insurance sector and one for the information technology.
The Alliance for a Secular and Democratic South Asia was formed in 1993 to combat rising religious intolerance in South Asia and to campaign for peace and justice in the region. We are committed to working towards a just, non-violent resolution of the crisis we are currently living through. If you are interested in joining us in this work, please call 617-983-3934 or e-mail email@example.com
20 May 2006
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