International Institute For Caspian Studies





Vahid Ahmady (Expert of Energy Markets and Finance)

  Islam, a religion of mercy, never permits terrorism. In light of Islamic texts, the act of inciting terror in the hearts of defenseless civilians, the wholesale destruction of buildings and properties, the bombing and maiming of innocent men, women, and children are all forbidden. Islam, the religion of tolerance, holds the human soul in high esteem, and considers the attack against innocent human beings a grave sin, this is backed by the Qur'anic verse which reads:
”Who so ever kills a human being for other than manslaughter or corruption in the earth, it shall be as if he has killed all mankind, and who so ever saves the life of one, it shall be as if he had saved the life of all mankind,” (Al-Ma'dah: 32). We should know that world has turned into a village where a single tragedy causes pain to the entire world. If the United States uses double standards in its judgment, Islam refuses to do so. Islam Condemns Killing of innocent, defenseless people, whether Muslims or Christians or any other ordinary people, and knows it as a catastrophic action, wherever it takes place or whoever does it. Killing of people, in any place and with any kind of weapons, including atomic bombs, long-range missiles, biological or chemical weapons, passenger or war planes, carried out by any organization, country or individuals is condemned .It makes no difference whether such massacres happen in Hiroshima, Nakazaki, Qana, Sabra, Shatila, Dir Yassin, Bosnia, Kosovo, Iraq or in New York and Washington. What America did today is that it had targeted a country and people who are among the poorest in the world. Anybody would condemn this attack, not because it's coming from America or because it's against Muslims and a Muslim country -- but because it was done outside the framework of international laws, peace lovers believe any decision should be led by the United Nations, not Washington. Peace and security can only be guaranteed when the aggressors stop their aggression and do justice to those who have been treated unfairly, especially the Palestinian people (why has the world closed its eyes on the crimes committed by the Zionists in the occupied Palestine and has been silent toward such tragedy?). The Islamic Republic of Iran condemns any eventual military action in Afghanistan which would lead to a new human catastrophe and condemns the Taliban's oppression of the Afghani people, while never forgets its nine diplomats and a journalist martyred by Taliban and as before stresses punishment of the factors of these catastrophic action in international courts. After this grievous axiom, I should refer to another reality, which comes to you:

It seems, US seeks different objectives to attack Afghanistan, where terrorism punishment is just an excuse, where some politicians know, Afghanistan territory stability a USA goal for preparing a secure energy corridor to isolate Iran alternative passage (like what US done for baku –ceyhan[the proposed Baku-Ceyhan oil line was not worth financing without massive subsidies from some extra-regional power]). In this article I try to focus on this subject in more details.

Caspian strategic situation:

The region is known globally for two key natural resources — oil and natural gas reserves, and a caviar-producing fish population (sturgeon) Both are highly valued export commodities, the sale of which can produce sorely-needed foreign exchange which, in theory at least, can be used for economic development purposes by the governments of the Caspian's littoral states. According to the U.S. Energy Information Administration, proven and possible natural gas reserves in the Caspian Basin comprises two-thirds of the region’s total hydrocarbons. Caspian governments are in need of revenues hence Oil and gas development has the potential to significantly help the new republics to economic prosperity as well as political stability and independence. Indeed, the key economic assets of Azerbaijan, Kazakhstan, Turkmenistan and Uzbekistan are oil and gas reserves.  The Caspian states have considerable potential wealth in their hydrocarbon reserves, both onshore and offshore. But, in order to realize that wealth, they must rely on neighboring countries for trans-shipment of their resources from the region by way of oil/gas pipelines and tankers. The biggest single obstacle to fabulous wealth in the region is the lack of export pipelines. While there has been considerable Western investment in the development and Transportation of Caspian oil, large-scale investments in Caspian gas projects have not yet become Economically viable. Based on an average consumption increase of 5% per year, Asian/Pacific demand for oil is expected reach 33.5 million bpd by 2010. China alone could be consuming 7.2 million bpd by 2010, and 10.7 million bpd by 2020, while oil production in Asia/Pacific region may decline from its current level of 6.3 million bpd.  where the demand for oil is projected to grow fast. It is said that, the gas import demand for just South Asia was 8.8 percent in 2000 and is expected to grow to 28.3 percent in 2005 and 54.9 percent in 2010.Some experts believe that More efficient use of petroleum products and the supplement of alternative sources of energy might lead to some decline in Western oil consumption, but there would be a very substantial increase in the developing regions of Asia[1] , Technology is starting to provide some of the answers (put forward by environmentalists), with the development of both cleaner fuels and more efficient use of oil, but would not resist the legitimate aspirations of developing countries for growth and progress. With the increase in demand in Asia, and with Caspian high hydrocarbon resources , the potential for trade between the two regions is high. The lack of sufficient indigenous gas reserves in Asia also makes trade with the Caspian (and Middle East )very crucial. The growing role of the Asia/Pacific region will play a major decision making role in the assessment of the Caspian region, with a vicinity to emerging consumer nations such as India, Pakistan, China and Japan It is apparent that the Middle East will not be able to meet Asian/Pacific demand by then. The resources of the Caspian will become more prominent in the total constellation.

South Asia Energy Demand Prospects:

South Asia is important to world energy markets because it contains 1.3 billion people and is experiencing rapid energy demand growth .After India, Pakistan and Bangladesh are the next largest South Asian countries in these categories. Economic and population growth in South Asia have resulted in rapid increases in energy consumption in recent years -- well above the rate seen in the OECD(Despite rapid growth in energy demand, however, South Asia continues to average amongst the lowest levels of per capita energy consumption in the world, but among the highest in terms of energy consumption per unit of GDP). The major energy issues facing South Asian nations today are keeping up with rapidly rising energy demand . Agency for energy consumption has projected that by the year 2010 South Asian countries shall be consuming more than double the current levels of primary commercial energy. It becomes self evident that South Asian countries would experience ever increasing energy demands and they lack the resources and capital to meet this demand. According to a World Bank report (1994) the poor quality of South Asia’s energy infrastructure would be the biggest obstacle to its economic development in the coming years.On the other hand South Asia lies in the vicinity of countries with rich natural gas and other resources. If long-term projections of rapidly increased energy demand for South Asia are correct, the region will require either significant increases in production, imports, or most likely both. Given the economic attraction of pipeline transportation of oil and gas, this becomes the most preferred means for import of natural gas into the region from the neighbouring countries. However the pipeline to be established for this purpose would require transit through more than one nation and in order to achieve economies of scale

sharing of gas supplies among the countries becomes essential. A strong case in thus made for co-ordinated action to meet the challenges and exploit the potential in the energy sector in the region. Although  India is attempting to limit its dependence on oil imports somewhat by expanding domestic exploration and production But  Low drilling recovery rates are a major part of the oil supply problem for India. Indian consumption of natural gas From only 0.6 trillion cubic feet (Tcf) per year in 1995 and 0.8 Tcf in 1999 is projected to reach 1.3 Tcf in 2005 and 1.8 Tcf in 2010. To pursue gas future demands, Although the Indian government has encouraged further exploration of gas rich areas but it will be unable to meet the increasing demand for natural gas and energy in India's near future due to cost and industrialization factors. Given that domestic gas supply is not likely to keep pace with demand, India will have to import most of its gas requirements, either via pipeline or LNG tanker. Security of energy supply is in this case of the utmost importance and a very critical point to be assessed.  Pakistan has only 21.6 Tcf of natural gas reserves, resulting in the production of 0.7 Tcf of natural gas, which is exactly the same as the level of natural gas consumption in the country. Presently, the Pakistani government still hopes the development of new natural gas fields would serve to prevent the future energy crisis predicted in the next four years. However, this hope falls short of the reality, considering the environmental concerns expressed by pastoral peoples as well as lack of industrial facilities to implement cultivation efforts[2]. As mentioned earlier, both India and Pakistan are comforted with the problem of acute gas supply shortfalls. Pakistan’s natural gas resources are being rapidly depleted with a projected shortfall of 1.6 billion cubic feet per day by 1999. This shortfall is expected to double in the following decade.Both countries have the advantage of bordering two major natural gas rich regions the Persian Gulf and Central Asia. It is this geographical proximity that can provide the basis for mutually beneficial co-operation

India and Pakistan western neighbour Iran possesses the second largest recoverable reserves of natural gas in the world. Saudi Arabia the UAE and Qatar likewise are endowed with huge natural gas reserves.Turkmenistan is a major producer of natural gas.

Options to Meet The South Asia Future Demands:

·         OMAN OPTION:                                                                                                                       1- A 1,144 Kilometre pipeline from Ras-Al Had in eastern Oman extending across the surface of the Arabian Sea to the Indian State of Gujarat. This pipeline would have an annual transmission capacity of 20 billion cubic metres. The governments of India and the Sultanate of Oman have abandoned plans to lay a subterranean pipeline through the Arabian Sea from Oman to the Indian coast. While officials have said the project was not feasible, others argue that politics played a part If the option is for a pipeline from Oman, then there will be no purchase of gas from Iran.

·         2- Instead of the proposed gas pipeline project, Oman has now signed a contract to supply 1.2 million tonnes of liquefied natural gas to India.

·         QATAR OPTION:                                                                                                             1-Two submarine pipelines have been bruited. Both could bring gas from the large North Dome field in Qatar to Pakistan; these proposals have been carried to the stage of semi-detailed engineering study. They are deemed to be technically feasible, and both would bypass Iran or Iranian waters, a feature that Washington and Tel Aviv view as advantageous[while pipeline can traverse Iran and Pakistan, and end in India, picking up Iranian gas along the way]. A 1,6 70 Kilometer pipeline from Qatar’s North Field extending through the port of Diba in UAE from where it would follow a sub sea route to Karachi. Daily transmission capacity of 1.6 billion cubic feet.  Even though Pakistan has signed a preliminary agreement to eventually purchase gas from Qatar, it seems increasingly unlikely that Pakistan will be included in the project in the near-term, due to it financial weakness and uncertainty about whether there will be sufficient demand growth.

·         2-Another option: Instead of building a pipeline, one can liquefy the gas in Qatar or Abu Dhabi, replicating plants that already exist, and ship the gas in cryogenic tankers to Pakistan. The economics of short-haul liquefied natural gas trading are favorable, especially since much of the capital is not necessarily dedicated to a single customer, which is the case of the proposed pipelines.


  • (TURKMENISTAN,KAZAKHSTAN,OZBEKISTAN)-AFGHANISTAN OPTION:A possible gas pipeline would link gas-rich Turkmenistan[3]{(ozbekistan)[or an oil pipeline from Kazakhstan]} region with Pakistan via Afghanistan, witch comes to you in next part of my article in more details. This project, however, comes a cropper for reasons while there are several other competing projects.


·        I.R.IRAN OPTION: [4]

·         1-Iran, looking more broadly to commercialize its very large gas reserves in the South, has proposed a line along the Makran coast, across Baluchistan, and connecting to the Pakistan grid near Multan or Sui. This proposal is compellingly more attractive because no “third-party transit” is involved. The producer delivers directly into the territory of the buyer. It is not without risk. The line is exposed for 600–800 kilometers through Pakistani Baluchistan where, once again, local rebellions have festered since before independence. Nonetheless, this option is viewed as less risky than that the Afghanistan one. According to officials in the Musharraf government, the project would earn Pakistan up to $150 million a year in transit fees. Equally important is Pakistan's consideration that the pipeline could offer some political leverage against India.But India, which is suspicious of Pakistan's intentions, has informed Iran that New Delhi and Tehran should look at other options for the delivery of Iranian gas to the Indian shore. It has suggested that the gas be shipped by tankers to an Indian port on the Arabian Sea. Tehran, however, appears to favor the pipeline project. New Delhi fully realizes that such a pipeline can be used by Islamabad at critical times to harass New Delhi . Within India, public protests are raging against internal gas pipelines, most notably in Gujarat, where farmers oppose a plan to build a pipeline connecting various districts. Apart from complaints that they were not given compensation, the farmers insist that digging up the entire area for the gas line will reduce the region to wasteland. There are four major ways considered for sending gas from the Persian Gulf to India:

                       1-Offshore from Persian Gulf to the Gulf of Oman and India

2-Onshore and offshore, from Iran and along the Pakistani coast to India

3-Onshore, from Iranian gas fields terminal at Assaluyeh to Pakistani boarder and through Pakistan to India.

4-Shipping of liquid natural gas (LNG) from Iran to India by tankers (Iran is going to install large facilities to export LNG of South Pars field to abroad)[5].

Non of these projects ever went beyond desk studies for various technical, financial and political reasons.

·         2-oil swaps: Iran itself considers Turkmenistan and Kazakhstan oil swaps by which Central Asia ships its crude oil to Iran's north and Iran then exports the same quantity of its own oil from the south. Under this arrangement, Caspian oil would be shipped to Iran's Caspian Sea ports, and transported via pipeline, rail, and tanker trucks to refineries located in northern Iran, with the oil exported instead from Iran's Persian Gulf ports on the oil producer's behalf. Kazakhstan signed an agreement in 1996 to begin oil swaps with Iran, although volumes were limited by contract and technical issues, including the initial problems by Iranian refineries in processing Kazakh crude oil. With the resolution of these issues, oil swaps of 40,000 bbl/d could resume in the near future. Volumes could increase further with the completion of an oil pipeline project that would increase transport capacity from the Iranian Caspian Sea port of Neka to Tehran and tie into the existing Iranian pipeline network.

·          3-One option would be to construct a pipeline from Kazakhstan through Turkmenistan to the middle of Iran, connecting to Iran existing pipeline network that could be used to transport oil south to Iran's Persian Gulf ports. Turkmenistan and Iran, have been actively discussed for almost a decade at the academic, Government, and industry levels. Although pipelines would have to traverse a distance of at least 1500 kilometers from Turkmenistan and Iran to India, existing networks of pipelines within Iran Can be extended to partly offset costs.


·         Bangladesh OPTION:                                                                                               Another possible import route would link the gas reserves of Bangladesh into the Indian gas grid. The discovery of natural gas reserves off shores of Bangladesh have added new potential source of natural gas to be imported into India.

·         One of the less probable options , would be to have a pipeline between Baku and Chah Bahar in Pakistan. The length of this route is 2,400 km, requiring a 52-inch pipeline, with a capacity of 2 million bpd. Projected costs are $4.4 billion. Operating costs will be $0.52 per barrel for the pipeline and $0.04 per barrel for the terminal. The second possibility is a pipeline between Kransnovodsk-Baku down to the port of Dayyer (Iran). The length of this route is 2,000 km and requires an 24-inch pipe with a capacity of 400,000 bpd. Costs of this project are $1.1 billion.



Afghanistan in general view:

The total population of Afghanistan range between 15-20 million, including refugees in other countries. More than 99.9% of Afghan people are Muslim, about 20% Shieia and 80% Sunni Muslims. Non-Muslim groups, including Hindus, Sikhs, and Jews make up less than 0.1% of the population. The climate in Afghanistan is dry with four seasons, including hot summers, cold winters and heavy snow year-round in the mountainous regions. Many years of war and political instability have left the country in ruins, and dependent on foreign aid. Over two decades of conflict have reduced landlocked Afghanistan to one of the world’s most impoverished nations. Rampant inflation has been reported. A great majority of the Afghan labor force is self-employed, mostly in agriculture and domestic trade but also, to a smaller extent, in cross-border trade. While the Taliban’s refusal to allow women to work or acquire an education effectively cuts the workforce by more than half. The majority of the population continues to suffer from insufficient food, clothing, housing, and medical care. Three years of drought, 22 years of conflict, and five years of brutal Taliban misrule, have brought untold suffering to millions of people.The long drought has caused the near-total failure of rain-fed crops in 18 of 29 provinces. Thirty percent of Afghanistan's irrigation infrastructure has been damaged or fallen into disrepair, rendering about a half of the irrigated lands unusable. Despite above-mentioned reality the main source of income in the country is agriculture. During its good years, Afghanistan produces enough food and food products to provide for the people, as well as to create a surplus for export. However, even in times of peace the agricultural base is very narrow—the soil is fertile but water is scarce, only about 12% of land is cultivated and only one-third of that is irrigated, the rest being mountains and deserts. Afghanistan is well endowed with minerals. Mineral wealth is virtually undeveloped, except for natural gas, which is produced in exportable quantities. There are deposits of iron ore, coal, copper, talc, sulfur, emeralds, gemstones and lapis lazuli; oil fields are found in the north. Natural gas, fruits and nuts, lambskins (Karakul), and hand woven carpets have been the main exports; As a result of civil war, exports have dwindled to a bare minimum; an illegal trade in opium (which Afghanistan is among one of the world's major producers [Afghanistan produced over 70 percent of the world's supply of illicit opium in 2000. Narcotics are the largest source of income in Afghanistan due to the decimation of the country's economic infrastructure caused by years of warfare.]) and hashish has continued.

Additionally Afghanistan occupies a strategic geographical position as a transit route for Central Asian hydrocarbons to the Arabian Sea.


Current Energy Situation Of Afghanistan:

The Soviets estimated Afghanistan’s proven and probable natural gas reserves at up to 5 trillion cubic feet (Tcf). Current Afghan gas production remains around 30 Mmcf/d, all of which is used domestically.Soviet estimates made in the late 1970s placed Afghanistan’s proven and probable oil and condensate reserves at 95 million barrels. Despite plans to start commercial oil production in Afghanistan, all oil exploration and development work as well as plans to build a 10,000 barrel per day refinery were halted after the 1979 Soviet invasion. Besides oil and natural gas, Afghanistan also is estimated to have 73 million tons of coal reserves, most of which is located in the region between Herat and Badashkan in the northern part of the country. At its peak in the late 1970s, Afghanistan supplied 70%-90% of its natural gas output to the Soviet Union's natural gas grid via a link through Uzbekistan. In 1992, Afghan President Najibullah indicated that a new natural gas sales agreement with Russia was in progress. However, several former Soviet republics raised price and distribution issues and negotiations stalled. In the early 1990s, Afghanistan also discussed possible natural gas supply arrangements with Hungary, Czechoslovakia, and several Western European countries, but these talks never progressed further.  Afghan natural gas fields include Jorqaduq, Khowaja Gogerdak, and Yatimtaq, all of which are located within 20 miles of the northern town of Sheberghan in Jowzjan province. Petroleum products such as diesel, gasoline, and jet fuel are imported, mainly from Pakistan and Turkmenistan.

In late September, 1999, the Taliban signed an exploration agreement with a Greek firm, ECC. The contract obliges ECC to conduct seismic and other exploration in southwest Afghanistan, which is considered to be highly prospective.


The importance of Afghanistan corridor:

Afghanistan has some oil and gas of its own, but not enough to qualify as a major strategic concern. Its northern and western neighbours, by contrast, contain reserves which could be critical to future global supply. The importance of Afghanistan may grow in the coming years, as Central Asia’s oil and gas reserves begin to play a major role in the world energy market. The potential for demand growth in the Asian market is nearly unlimited at prices that both buyers can pay and suppliers can profit. This is in sharp contrast to routes to Europe where the regional producers would likely find intense competition among themselves for a limited market. Russia, Turkmenistan, Kazakhstan, and Uzbekistan have all publicly noted their interest in working jointly toward an eastern corridor. In the first stage of development, Turkmenistan is likely to provide most or all of the gas, with incremental supplies coming later from other countries. Since Pakistan and India's demand for gas has nearly no ceiling --at prices around of $2 per mmBtu-- several suppliers could be considered once Turkmenistan gets the export ball rolling. The final price of the gas will be an issue, but since Pakistan does not have access to any competing supply and is desperately in need of incremental volumes, negotiations could progress more rapidly than those with oversaturated European buyers.  Competition in the European market is quite intense, and while buyers might welcome another supply source, there is more than enough gas available for quite some time from existing suppliers such as Russia, Norway, Algeria, the Netherlands and  the UK. Russia, for its part, has displayed an inclination to prevent Turkmen gas from reaching Europe, as it would constitute direct competition in eastern and southern Europe over a similar or even shorter distance.Competition or liberalization in Europe would be a double-edged sword for Turkmenistan and its Caspian brethren. On the one hand, gas on gas competition opens up the possibility of marketing opportunities in Europe. However, competition is also likely to lower price, which means that it will be even harder to Caspian suppliers to beat existing baseload suppliers on price.Afghanistan could prove a valuable corridor for this energy as well as for access to markets in Central Asia. In addition, Afghanistan can serve as a trade link between Central and South Asia. Washington is against sending the fuels from the landlocked states in pipelines through Iran.Since the next best route as US opinion ran through Afghanistan. The prospective source of supply exists; that is incontestable, and Pakistan does indeed need energy.Further, ironically, the pro forma economics of the trans-Afghan pipeline are positive. The distance is relatively short, and the terrain is not particularly difficult or challenging. The proposal involves building both oil and natural gas pipelines through western Afghanistan to connect with the pipeline networks in Pakistan. The high growth rate of the population in Pakistan and India and the industrial boom in the Asian Pacific region have increased the demand for crude oil. This increase has created a significant market for the Central Asian suppliers. According to UNOCAL studies, this demand will increase the exports of oil with a good price in the next 15 years. Therefore, traditional oil export by tanker-ships will be very limited. The tanker traffic in the Black Sea routes crossing the Bosphorus and the Baltic route via the Straits of Denmark is already near its limit. In this case, the proposed pipelines through Afghanistan and Pakistan would balance the traffic in the Black and Baltic Seas. The pipeline would also provide much greater financial resources for the Central Asian countries and a faster import for the Asian Pacific market. The project offers numerous long- and short-term benefits to the region. It will "deliver an estimated US$ 50 to US$ 100 million a year in transit fees to Afghanistan as well as provide(s) gas in Afghanistan itself." Additionally, the project will stimulate business, attract investments, reinforce regional cooperation, enhance trade and communication, employ thousands of local people, and improve living standards of the region. For Afghanistan, implementation of the pipelines would serve as a spring board to facilitate the country’s transition from a war economy to a productive, growing economy . Providing gas, a clean-burning energy for the Herat and Kandahar provinces, will help the small industries and improve the environment. A big portion of the population in these provinces heavily depends on wood fuel which has caused a gradual deforestation of the area. Using natural gas will save the green environment, and it will improve agricultural production. Also, there is a possibility that northern Afghanistan’s gas resources would be connected to the Turkmenistan pipeline via Uzbekistan, which could result in greater financial stability for Afghanistan.  It will link plentiful supplies of clean-burning natural gas with growing regional markets, employ thousands of local people, foster regional cooperation, and enhance trade, transportation and communication. The development of pipeline-related infrastructure also will create opportunities for economic growth in other industries. In addition to regional advantages, the pipeline offers specific benefits to the countries involved. Turkmenistan will reach new markets with its plentiful gas reserves, while Pakistan gains a reliable source of clean-burning fuel to drive its economic growth. Afghanistan will earn extensive economic benefits from the pipeline, both during construction and over the life of the project. The transit fees seems to be low, at least during the costly front end years of the operation, because Afghanistan would rather have a low transit fee than none at all. By contrast, Iran would be more likely to peg its transit fee closer to the opportunity cost of moving the gas through Russia or Azerbaijan. While obvious disadvantageous for project is imaginable . For instance the people of Afghanistan paid a big price to the environmental and social impacts of the Red Army's pipelines during 80's. Yet, after many years, the damages, caused by this pipeline on agricultural lands, water system and other life sustaining elements of the environment, are not recovered. The black scars of oil spills, fires and fighting scenes are still visible on the landscape of Afghanistan. The major environmental and social impacts of cent-gas project could arise during the exploitation and abandonment stages. It is speculated that the following environmental factors would be greatly affected by the extension of this pipeline in the territory of Afghanistan: the population and habitat expansion, the volume of the social services in the region, the productivity of farmlands, pastures and other agricultural activities in the surrounding areas of the pipeline route, soil and vegetation covers, conservation of water resources and wildlife conservation.


Central Asia oil& Gas  pipeline project:

OIL:Turkmenistan has signed a memorandum of understanding with Afghanistan and Pakistan to build a 1 million bbl/d pipeline to carry petroleum to Pakistan and world markets via Afghanistan. The proposed pipeline would connect the Caspian Sea, Western Siberia, Kazakhstan to Pakistan, India, and the Asian pacific countries. In October 1997, a tripartite commission comprising the Islamic State of Afghanistan, Turkmenistan, and Pakistan was formed to start work on building this pipeline. No progress was made on these pipelines due to the ongoing  war in Afghanistan. Following the August 20, 1998 U.S. bombing raids on suspected Afghan strongholds of suspected terrorist Osama bin Laden, Unocal announced that it was suspending work on the pipelines, and in December 1998, it withdrew from the consortium (comprising the Turkmenistan government, Delta Oil (Saudi Arabia), Itochu (Japan), Pakistan's Crescent Group, Hyundai (South Korea), and Japan's Indonesia Petroleum Company).

GAS:In July 1997, Turkmenistan signed a memorandum of understanding with Afghanistan, Pakistan, and Uzbekistan to build a Central Asia Gas (Centgas) pipeline to carry 0.7 Tcf per year of natural gas to Pakistan via Afghanistan (and possibly to India as well). However, the withdrawals of consortium members Gazprom in June 1998 and Unocal in December 1998 left the project in limbo. In April 1999, Pakistan, Turkmenistan and Afghanistan agreed to reactivate the Centgas project, and to ask the Centgas consortium, now led by Saudi Arabia's Delta Oil, to proceed. The civil war in Afghanistan is the main obstacle which frustrates the oil consortiums. The prosperity of the pipeline project depends solely on an internationally recognizable, broad-based government in Afghanistan. The absence of such a government caused the international financial institutions, like the World Bank, to stop financing the project. Without such a financial resource, the completion of the pipelines would be just a dream.The greatest barrier to the project is financing. It will be extremely difficult to convince the banking world to loan over $1.4-billion (70% of the project's estimated cost and a standard debt-equity ratio on lending in the energy sector) to build a line through Afghanistan because the risks are simply too great. Instead, the project is likely to need multilateral backing such as the World Bank or to find backers that can finance the project from equity. None of the companies presently looking at the Afghan route can afford to pay for it themselves, so the project is in danger of being slowed by a financial morass. International lenders such as the World Bank[If Afghanistan territory stabilized] may be interested in such a project because it would provide a steady source of income for Turkmenistan and Afghanistan while promote international environmental and energy efficiency goals by cutting coal and oil use in Pakistan and India.

The U.S.A objectives in Introducing a new energy  corridor:

Islamabad and Washington backed the Taliban as they swept to power in 1996. Without Pakistani support in the form of money, military supplies, advisors, fighters and even some regular troops, the Taliban could not have achieved power, nor would bin Laden have had the sanctuary from which to plot against Americans. Islamabad has consistently tried to install governments in Afghanistan that not only protect its interests, but would also be the most malleable to them to create the stability that the laying of lucrative pipelines for Central Asian energy resources requires. The Taliban regime is a product of the civilized world and the international community. The Taliban were acceptable at first, but then Osama bin Laden entered the equation, who began training anti-Western guerrillas in Afghanistan . Pakistan's Central Asian policy, if there is one, hangs on its Afghan policy, which in turn depends on Taliban and American policy of containment of Iran. Under this policy United States announced sanctions against all companies, whether American or not, that does business with Iran . In short, the American quarantine of 1995-6 is not holding" Pakistan's only visible and concrete, expected gain in this whole game were the plans of a pipeline from Turkmenistan to Pakistan via Afghanistan. Just when Taliban apparently poised to take over the whole of Afghanistan, UNOCAL announced the suspension of its plans to construct the much trumpeted pipeline. The US firm Unocal had its fingers in another ambitious project that would pump Turkmenistan's abundant natural gas through Afghanistan to the ever-growing markets of Pakistan and India.

By the way, American objectives in the Middle East are two-fold: Protect Israel, and stabilize the region (and thus protect the free export of oil). Afghanistan and its neighbors are important to the United States for many reasons. The region around Afghanistan is rich in oil and gas, which, if it can be exported, will help the Central Asian states consolidate their independence and develop economically. But chaos emanating from Afghanistan has fostered political instability and made economic progress more difficult.

On the other hand, The trend has major implications for the United States and global energy supply patterns if countries like China and India increasingly Tap into Middle East oil supplies to meet growing demand. The U.S. policy is set for a route which excludes Iran and Russia. Although an alternative transit route would be through Iran to the Gulf BUT the U.S. is still seeking to limit Iran’s influence and wants to see Turkmenistan’s oil and gas exports take pipeline routes other than through Iran and Russia. Since the end of the Cold War the United States has viewed Iran as one of the major adversaries. Hence for years the U.S. policy towards Azerbaijan and Central Asia has apparently been aiming at isolating Iran, if needed complying with some of Russia’s interests. For example, in 1995, the United States government vetoed any Iranian participation in the Azerbaijan oil consortium, but accepted a Russian participation. By accepting a transit route through Iran, the United States would recognize Iran as a major power in international oil politics, in the Gulf and in Central Asia.

By accepting a stronger Russian stake, eventually the transit through Russia to Central and Western Europe, the United States would achieve its objective of diverting the Azeri and Central Asian crude from the Gulf. This would, however, also strengthen Russia’s position in the world energy markets and imply at least a tacit acceptance of the return of Russia as the dominant power in the Caspian Region and Central Asia.

But pipelines through Afghanistan would allow the US both to pursue its aim of "diversifying energy supply" and to penetrate the world's most lucrative markets.

Afghanistan ceased to be of strategic interest to the U.S. after the Soviet withdrawal and, most decisively, after the collapse of the USSR. Since then the U.S. government has mainly defined its interests in Afghanistan as “drugs and thugs. The U.S. opposes all efforts by Iran to capture a share of Central Asian trade and to serve as an outlet to the market for Central Asian oil and gas. In September, a few days before the attack on New York, the US Energy Information Administration reported that "Afghanistan's significance from an energy standpoint stems from its geographical position as a potential transit route for oil and natural gas exports from Central Asia to the Arabian Sea. As the researcher Keith Fisher has pointed out, the possible economic outcomes of the war in Afghanistan mirror the possible economic outcomes of the war in the Balkans, where the development of "Corridor 8", an economic zone built around a pipeline carrying oil and gas from the Caspian to Europe, is a critical allied concern.When the countries of the Caspian region began to turn their attention toward Iran as an exit route for their oil and gas, the United States granted their leaders official visits. Between July 1997 and April 1998, Presidents Aliyev of Azerbaijan, Nazarbayev of Kazakhstan and Niyazov of Turkmenistan, all passed through Washington to hear the U.S. government lecture them about alternative export routes. By November 1997, east- west oil routes and the Baku-Ceyhan pipeline, bypassing Iran, had become the new religion in the Washington policy- making community. A TransCaspian gas pipeline was touted as the solution for Turkmen gas to access Turkey, so as to avoid Iran. The United States would like to prevent Turkmenistan from increasing its reliance on an Iranian exit route. Turkmen gas production in 1997 collapsed to one-fifth the levels reached in the early 1990s, causing enormous financial losses. The only way for Turkmenistan to rectify this situation in the near future is to begin looking for market access in and across Iran. But with east-west oil routes looking increasingly questionable the United States is staking its claim to east-west gas routes.The isolation of Iran is over for all but the United States. With the issuance in May 1998 of a national-security waiver for Total, Gazprom and Petronas and their investment in Iran's South Pars gas field, the U.S. policy of excluding Iran from the Caspian also began to unravel. Since then, two non-U.S. companies have begun to ship some oil from Turkmenistan on an exchange basis into Iran. The oil is sent to Iran's Tehran refinery, with the companies receiving comparable volumes at Iran's southern port of Kharg Island.Some other important energy projects by foreign companies in Iran territory is mentionable. But we should not neglect some realities. For instance and At the end, with an overview of last mentioned issues, probabilities for Afghanistan corridor option, continues U.S.A efforts to isolate I.R.Iran route, and Caspian basin countries in transparent policies regard Iran, should make Iranian officials to find proper remedy to prevent baku-ceyhan repetition. 


      1-     Hill and Specter,”The Caspian Basin and Asian Energy Markets”, s e p t e m b e r 2 0 01.
2-“Caspian Resources: Iran, the Most Suitable Transit Route”, Iran Today; May - Jun. 1998, No. 21
Omar Zakhilwal ;Institute for Afghan Studies.
4-Cyril Widdershoven: World oil consumption putting pressure on incorporation of Iran”.
5-“entral Asia's Great Game Turned on its Head”,Reuters, September 25, 2001 
6- Peter Symonds; “new chapter in the war-torn history of Afghanistan”, 26 September   1998
7- Michael H. Glantz ,"Global Environmental Problems in the Caspian Region", 14 May 1999
8- Ijaz  Khan ,“Afghanistan, Pakistan,Iran  and  the  New  Great  Energy   Game”.
9- Noreng ,”A New Oil Province with Heavy Risk Factors”.
10- Ben Partridge, “ Turkmenistan: Iranian pipeline option sets a model for Caspian region”.
11- Niaz A. Naik,“Energy Scenarios in South Asia”. 
12- George Monbiot ,”America's Pipe Dream,The war against terrorism is also a struggle for oil and regional control” ,Guardian ,23rd October 2001.  
13- Daud Saba ,“Environmental Impacts of the CentGas Pipleline in Afghanistan”.
14- Ira B. Joseph,“Caspian Gas Exports: Stranded Reserves In A Unique Predicament”.
15- Hooshang Amirahmadi ,“Giving all a piece of the pie,The political risks of various pipeline routes in the Caspian basin “,1998.
16- George Monbiot,“America's pipe dream,A pro-western regime in Kabul should give the US an Afghan route for Caspian oil” .
17-,farhad ahad, bsme, msme, mba, “what benefits would pipelines provide for Afghanistan?” a business case sutdy of the Unocal energy consortium , a case study  presented to the members of the society of afghan engineers Alexandria, virgina, July , 2001.
18- Douglas fisher,“a new day of infamy “, Sun Ottawa Bureau.
19- Abbas Maleki, Caspian studies institute chairman ”Gas Pipelines: A bridge among Iran, Pakistan, and India”.                                                                           

[1] - As various international energy forecasts predict an increase in energy demand for oil in the years to come, the Caspian region is and will become more and more prominent as one of the prolific regions in the world. Meanwhile this fact should not be neglected that: Growth in European oil consumption is slow and competition is intense. In south Asia, by contrast, demand is booming and competitors are scarce. Pumping oil south and selling it in Pakistan and India, in other words, is far more profitable than pumping it west and selling it in Europe.   


[2] -In the other hand some experts state that: the gas reserves in Balouchistan are dwindling fast, and are predicted to fall critically short by 2010. Therefore, Pakistan remains desperate for a fresh supply of natural gas, at favorable economic terms (read very cheap), which is not an option for any gas coming from Iran. With cost of debt consuming over 53 percent of its GDP, Pakistan simply cannot afford gas at market prices. The sea route is not an option either; Pakistan cannot afford expensive liquification and regassification plants necessary in order to import gas via the sea from the Pakistan-friendly United Arab Emirates. Since the cost of each a liquification plant or a regassification plant runs about $1 Billion each, and the cost of an LNG tanker is approximately $250 million, the strategic value of CentGas in cold cash terms is $2.25 Billion for Pakistan. Hence, the options for Pakistan are few.



3- The pipeline was supposed to carry gas from the Turkmen Dauletabad fields, among the world's largest, to Multan, southwest of Lahore. It is estimated that Dauletabad could produce 15 billion cubic feet of gas per year for 30 years.


[4] - Favored by Iran and oil companies, the Iranian southern routes make economic and commercial sense. They are cheaper to build, pass safer territories, and pose no serious environmental hazard. Significant pipeline and port infrastructure also exists. Extensive oil pipelines south of Iran also exist as do port facilities in the Persian Gulf from where both Europe and big Asian market could be efficiently served. Most notably, the Iranian route also offer the swap option, something no other routes have offered as yet.Oil companies and governments worry that the southern option increases the world's reliance on the Strait of Hormuz, a concern that can be addressed by linking the pipelines to the port of Jask on the Oman Sea. Certain geologists have also argued against the line because of possible seismic problems in Iran. Yet, in the last several decades earthquakes have not posed problems for the pipelines in Iran

1 - The cost of transmitting 30bcm per year of gas from Iran to Indian sub-continent would be in the onshore of $3 billion considering the land route. If we consider the option of a combination of land and sea from Iran to shallow waters of Pakistan and then Indian land it would be about $4 billion. The pipeline which bypasses Pakistan through deep sea needs $4.4 billion. It covers $3.6 billion for pipe and $800 million for compressors.