| Pakistan’s Dream to Become Oil & Gas Pipeline Cross Road Dashed | |||
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By: Hari Sud September 12, 2005 Views expressed here are author’s own and not of this website. Full disclaimer is at the bottom. 
FeedbackGeography has been kind to Pakistan. Its creators never realized it when they asked for a Muslim majority country adjoining other Muslim countries of the Middle East. Its location in today’s context is of great importance. It borders China, Afghanistan, Iran and India and sea next to Pakistan permits deepwater shipping. Its population base is highly skilled hence if permitted by its military rulers; it could become a lot more prosperous than it is today. The latter is a dream only. Military priority is to stay in power and plan an invasion of India either to pry away Kashmir from it or recreate Muslim rule in India all over again. In the process monies have been wasted on nuclear bombs, missiles and organizing a terror network. Take for example $30 Billion spent over 30 years to build a nuclear bomb and missiles to counter India. It is wasteful. Had this money gone into building prosperity then it would have added $300 Billion to the Pakistani economy? One opportunity came knocking at Pakistani door in last five years. This opportunity would have made Pakistan an Oil and Gas crossroad, after the Persian Gulf area. A pipeline system to carry gas and oil from Iran to India knocked at the Pakistani door. Had there been peace between the two neighbors, this would have been a great money making opportunity for them. India cleverly used the opportunity to get even a better deal from the US. A similar opportunity exists to route the UNOCOL pipeline from Turkmenistan to India and to the Arabian Sea. This opportunity has also been shelved, as security is the main concern. Pakistan must blame itself for these major economic losses. Each of this would have enriched the Pakistani treasury with monies beyond their imagination and minimized Pakistani dependence on American Cash. India – Iran Pipeline A fifty-four inch pipeline to India will carry 75 MSCMPD of gas to India. India is energy deficient, it needs this gas to either generate electric power or supply thermal energy to industry. In addition, it could be piped for household use in the northern and western part of India. With this pipeline in place, additional Pakistani requirements of 20 MSCMPD could also been met. Pakistan needs this additional gas soon as Bulochistan gas supply is almost exhausted. In the process Pakistan would have collected $500 to $700 million a year as gas transshipment fees from India. Other benefits include monies, which the maintenance infrastructure would have spent in the country. Now this pipeline appears to be a dream. As Indian Prime Minister Dr. Manmohan Singh rightly pointed out during his US trip that risks involved with this pipeline are so great that no guarantor could ever be found to under-write the $4 to 6 Billion expense involved in building the pipeline. Had this pipeline venture been successful then Iran and India could have laid an additional pipeline to carry oil from Iran to India. That would have resulted in additional income to Pakistan. The above is not likely to happen, as India has almost backed out in favor of nuclear energy. Economic losses for Pakistan are great. But this has not toned down Pakistani rhetoric one bit. They are as stubborn as ever and still wish to pursue Kashmir agenda. Northern UNOCOL Pipeline Turkmenistan has all the gas, which India could use in addition to what is available from Iran. Two sources would have been better than one for India. Unfortunately the pipeline had to pass thru politically unstable Afghanistan and hostile Pakistan. Afghanistan is in deep political troubles because the British stirred up the political situation in the nineteenth and the twentieth century. Then in last 25 years the Soviets and the US out did each other. Each had their agenda. Finally Pakistan picked up where the US left and made a mess of an already disturbed situation. Today US are again back and its presence is aided and abetted by Pakistani self-interest. At the moment economics is not in the minds of the Afghani people. Hence no pipeline could ever be located thru this troubled region. Turkmenistan realizing a no go situation have decided to follow a more northwesterly route. They would use the Russian pipeline system to sell their gas in the Eastern Europe. With the foregoing, an opportunity has been missed. An additional $500 million in transshipment fees could have been collected had this pipeline materialized. Not only that, oil pipeline could have followed the gas example and enriched Pakistan further. Advantages of Sitting at the Cross Roads The ancient Silk Road passed thru Central Asia. The Turks who inhabited most of the Silk Road’s route enriched themselves with the proceeds of the fees they charged the caravans, which traveled thru their territory. Pakistan would have been beneficiary in the same way. The current Jehadi culture in Pakistan and its pre-occupation with India together with politically disturbed Afghanistan makes this export impossible. Oil and Gas is the lifeblood of today’s industry. Middle East and now Central Asia is very lucky to be sitting on a big pile of this vital resource. The West has cornered most of the Middle East Oil and Gas in the last 50 years. Also the Middle East production has peaked. Without additional finds and production, oil prices have begun to spiral out of control. Newly discovered oil and gas finds in Central Asia are expected to fill up the gap between supply & demand. This will also provide the fast developing Asian nations with energy security. But foolishly for the Asians, the West is taking advantage of the insurmountable difficulties in routing gas pipeline through a maze of problems towards India and the Arabian Sea. Hence the West is very quickly cornering this supply also. The newly inaugurated pipeline is designed to take Turkmenistan oil to the Mediterranean Sea. This is not good news. Energy hungry Asia will soon be left with no resources to exploit. If Pakistan is not hobnobbing in Afghanistan or if Pakistan cools off its desire to acquire Kashmir then Central Asian and Iran’s oil and gas reserves could travel south and east via Pakistan to India. The remaining amounts could further reach the deep-water ports of Karachi and Gawdar for ship-based exports elsewhere. With Pakistan as a major network center, it could have rivaled in prosperity to the Turks along the Silk Road. Can Pakistan Re-engineer Itself to be an Economic Power House It is possible, but most unlikely under the present circumstances. In order to become the energy crossroad of the world, Pakistan would have to: • Send the army back to barracks and cut its size, • Re-educate the masses in economics as opposed to the Jehad, • Minimize political and military tension along the Indo-Pak border, • Implement progressive policies in order to win confidence of the world that Jehad and nuclear weapons proliferation is its past. • Organize a sort of a free trade in between, Iran, Pakistan, Afghanistan, and Central Asia for mutual benefit (with oil and gas sales, a lot of cash will be collected; free trading nations will buy as much as possible their goods and services within the region instead of elsewhere). • Help Iran rationalize its political structure to become a progressive nation. In short, Pakistan should do everything, which will facilitate commerce and trade. Revenues from transshipment fees would make Pakistan less dependent on the US for cash. The latter would calm the Pakistani people’s nerves, which are fairly strained with the presence of US troops on Pakistani soil. With above not happening, Pakistan will have to stay dependent on US cash. India will have to build four or five large nuclear power plants to generate the much-needed power; Iran will have to be content with lack of sale of its abundant gas supply and Central Asia will have to use the Russian gas supply system to sell its resource to Eastern Europe. A further benefit accrues to the West - their hold on Central Asian oil is strengthened. For a long time to come, this oil and gas will follow the Caspian Sea route to reach the Mediterranean Sea. Hari Sud
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