Published on October 22, 2010

The groundwork for regional pipeline projects emanating from Central Asia through Afghanistan, Pakistan, India and Bangladesh has been laid. These pipelines will define new political partnerships once America cuts down its forces in Afghanistan.

Background interviews with senior Pakistani and American officials revealed a new game afoot. This began when the White House appointed David Goldwyn in September 2009 as the coordinator for nascent Central Asia-South Asia pipelines. Goldwyn was to report directly to the Secretary of State. Aimed at resolving Pakistan’s energy problems, his appointment appears to be part of Washington’s larger political game plan for South and Central Asia. Although Goldwyn is to be the coordinator, Mr. Richard Holbrooke, the US’ special envoy to Pakistan and Afghanistan would likely be the main engine in implementing the plan which relates to two regional gas pipelines—the Iran-Pakistan-India pipeline (IPI) and the Turkmenistan-Afghanistan-Pakistan-India pipeline (TAPI).

 Peace negotiations and pipeline politics go together

As peace negotiations with the Taliban in Afghanistan involving the Pakistan Army, UAE and Saudi Arabia began to surface as the new reality, an initial agreement between Pakistan, Turkmenistan, India and Afghanistan was signed on 20 September 2010 to initiate the sale-purchase deal of the TAPI.

“The final framework agreement has not been signed yet, but a three month period has been mutually agreed on,” a senior Pakistani official from the Ministry of Petroleum and Natural Gas told this writer.

The TAPI project would pump 1.25 BCF (Billion Cubic Feet) of natural gas into Pakistan and India through the southern Afghan province of Kandahar, the Taliban’s stronghold and spiritual heartland.

The project, said a source in the energy industry last year when Pakistan prepared a comprehensive energy paper, was handed over to Richard Holbrooke, and he was urged to play a productive role. The paper pointed out that the TAPI steering committee meeting was to have been convened earlier, but India blocked the meeting each time it was scheduled to be held. Pakistan urged the US to mediate with India to resolve the problem.

With Pakistan being accused of playing a controversial role in Afghanistan (by India particularly), American cooperation was needed to mediate the strained relations between Pakistan and Afghanistan as well. Pacifying non-Pashtun northern warlords and politicians was an imperative.

Sources said that, with American urging, India has agreed to convene a conclusive steering committee meeting for the pipeline projects in the near future. But no date has been fixed so far.

“Everything is in place. The steering committee meeting will discuss operational matters and expedite procedures in regard to the pipelines. There is one catch. That is the sensitivity of Pakistan and India relations. Anything, any terror attack on India, could reverse all the developments and [the progress made could] take several years to restore. That’s why Pakistan elected not to shelve the Iran-Pakistan-India (IPI) pipeline project which has been finalized between Iran and Pakistan. The project was to expand to India. But even if India does not participate, there would be no problem. Pakistan will continue with it as an Iran-Pakistan project,” a senior Pakistani bureaucrat said.

 “At the moment Pakistan’s gas production is 4.2 BCF. This is equal to the quantum of its consumption. Pakistan’s actual need is approximately 5.5 BCF. Thus the shortfall of energy in Pakistan is 1.3 BCF. Pakistan’s energy requirement is expected to jump to 35 BCF by 2025. Pakistan would be getting 750 MCF [1000 Cubic Feet] from the IPI and 1.25 BCF from the TAPI. Therefore, Pakistan needs both projects to cater for its domestic and industrial needs. Pakistan has several gas fields which could be exploited once the law and order situation improves. It could exploit the fields situated in southern Punjab, KhyberPakhtoonkhwa and Balochistan to balance the deficit,” the official added.

 This correspondent wondered about the American reaction to the IPI project and what would be the future of that project if Americans put sanctions on Iran. The response from a senior official in a Pakistani strategic organization was:

“There is a chess game of regional politics being played between the international powers. Regarding the TAPI, both Russia and the US are on board as this pipeline will allow them leverage over all the countries involved. However, this energy grid will restructure regional politics with every country in the region having a stake in peace.”

 “Had the Americans wanted to stop Pakistan’s participation in the IPI, we would have [received] a shut-up call immediately and pulled ourselves out of the deal. The Americans have been silent. No instructions have come from Washington for Islamabad to pull out. The fact is that the IPI makes Iran a partner for regional peace. Iran has considerable influence in Afghanistan, and with the IPI, Iran’s interest in peace would rise.

 Iran is facing a serious liquidity crunch. It needs to enhance its energy capacity; otherwise its reserves would deplete in the coming years—and with that its revenues. Whatever amount Iran gets from IPI is likely to be reinvested to develop its oil and gas fields,” the official said. He added that although the Americans had not said a word on the IPI, Pakistan has received a kind of a green signal of their turning a blind eye to the project even if sanctions were to be imposed on Iran.

 But, all is linked with the defeat of militants in Afghanistan. Only then would it become clear how far the pipeline grid will have steered the regional players and America in the direction of peace.

Syed Saleem Shahzad is the Chairman and CEO of Asia Depatch (www.asiadespatch.com) and author of an upcoming book on Al-Qaeda, its ideology, strategy and tactics, which will be published by Pluto Press UK in June 2011.

(Asia Despatch Exclusive for MEPEI)