ISLAMABAD (AFP) – French firm Total is working behind the scenes to take the lead on an ambitious pipeline connecting Central and South Asia, sources close to the project say, pioneering a novel gas exchange mechanism to overcome legal hurdles.
It is one of the most ambitious energy projects in the world, connecting the giant gas fields of Turkmenistan to Pakistan and India, two emerging energy-hungry markets, while crossing the rocky valleys of southern Afghanistan which are partly controlled by Taliban insurgents.
Following the withdrawal of Soviet troops from Afghanistan in the late 1980s, US group Unocal and Argentina’s Bridas were chomping at the bit to build major gas routes in a re-play of the 19th century “Great Game” when Russia and Britain jostled for control of the strategic region.
Over the past few years, rivalry has given way to the idea of regional cooperation for an 1,800 kilometres pipeline connecting Turkmenistan-Afghanistan-Pakistan-India, or more simply TAPI.
Last year, sources close to the project had indicated US giants ExxonMobil and Chevron were interested in leading the $7.5 billion project.
Since then, new players have announced their interest.
“Other companies, including Total are now in the race and they are actively negotiating with Turkmenistan,” said Mobin Saulat, director of the Pakistan’s Inter State Gas System which is in charge of the Pakistani part of the pipeline.
He also named UAE’s Dragon Oil as a contender. Total declined to comment on the reports when contacted by AFP.
Chevron and ExxonMobil are trying to convince Turkmenistan to cede control of some of its gas fields, so far without success since Turkmenistan law forbids handing over onshore assets to foreign companies.
Total, on the other hand, “may agree to be the leader of the consortium without holding direct shares” in Turkmen fields, said another official in the sector requesting anonymity.
To work around the problem, TAPI partners envisage an exchange system: companies controlling gas reserves in the Caspian Sea will pump in an equal amount of gas to Turkmen territory to that which they want to export from the country, allowing them to abide by local law.
“Nobody wants just to have a pipeline, everyone wants a piece of the cake,” said Werner Liepach, Pakistan director of the Asian Development Bank (ADB) which wishes to find a lead company by the end of November.