Workers in Kazakhstan complete a section of a pan-Central Asian gas
pipeline
Pipelineistan – the prime Eurasian energy
chessboard — never sleeps. Recently, it’s Russia that has scored big on
all fronts; two monster gas deals sealed with China last year; the launch of
Turk Stream replacing South Stream; and the doubling of Nord Stream to Germany.
Now, with the possibility of sanctions on Iran finally vanishing by late
2015/early 2016, all elements will be in place for the revival of one of
Pipelineistan’s most spectacular soap operas, which I have been following
for years; the competition between the IP (Iran-Pakistan) and TAPI
(Turkmenistan-Afghanistan-Pakistan-India) gas pipelines.
The $7.5-billion IP had hit a wall for years now – a casualty of
hardcore geopolitical power play. IP was initially IPI – connected to India;
both India and Pakistan badly need Iranian energy. And yet relentless pressure
from successive Bush and Obama administrations scared India out of the project.
And then sanctions stalled it for good.
Now, Pakistan’s Minister of Petroleum and Natural Resources Shahid
Khaqan Abbasi swears IP is a go. The Iranian stretch of the 1,800-kilometer
pipeline has already been built. IP originates in the massive South Pars gas
fields – the largest in the world – and ends in the Pakistani city of
Nawabshah, close to Karachi. The geopolitical significance of this steel
umbilical cord linking Iran and Pakistan couldn’t be more graphic.
Enter – who else? – China. Chinese construction companies already
started working on the stretch between Nawabshah and the key strategic port of
Gwadar, close to the Iranian border.
China is financing the Pakistani stretch of IP. And for a very serious
reason; IP, for which Gwadar is a key hub, is essential in a much larger long
game; the $46 billion China-Pakistan economic corridor, which will ultimately
link Xinjiang to the Persian Gulf via Pakistan. Yes, once again, we’re right
into New Silk Road(s) territory.
And the next step regarding Gwadar will be essential for China’s energy
strategy; an IP extension all the way to Xinjiang. That’s a huge logistical
challenge, implying the construction of a pipeline parallel to the geology —
defying Karakoram highway.
IP will continue to be swayed by geopolitics. The Japan-based and
heavily US-influenced Asian Development Bank (ADB) committed a $30 million loan
to help Islamabad build its first LNG terminal. The ADB knows that Iranian
natural gas is a much cheaper option for Pakistan compared to LNG imports. And
yet the ADB’s agenda is essentially an American agenda; out with IP, and full
support to TAPI.
This implies, in the near future, the strong possibility of Pakistan
increasingly relying on the China-driven Asian Infrastructure Development Bank
(AIIB) for infrastructure development, and not the ADB.
Recently, the IP field got even more crowded with the arrival of
Gazprom. Gazprom also wants to invest in IP – which means Moscow getting closer
to Islamabad. That’s part of another key geopolitical gambit; Pakistan being
admitted as a full member, alongside India, of the Shanghai Cooperation
Organization (SCO), something that will happen, soon, with Iran
as well. For the moment, Russia-Pakistan collaboration is already evident in an
agreement to build a gas pipeline from Karachi to Lahore.
Talk to
the (new) Mullah
So where do all these movements leave TAPI?
The $10 billion TAPI is a soap opera that stretches all the way back to
the first Clinton administration. This is what the US government always wanted
from the Taliban; a deal to build a gas pipeline to Pakistan and India
bypassing Iran. We all know how it all went horribly downhill.
The death of Mullah Omar – whenever that
happened – may be a game changer. Not for the moment, tough, because
there is an actual Taliban summer offensive going on, and “reconciliation”
talks in Afghanistan have been suspended.
Whatever happens next, all the problems plaguing TAPI remain.
Turkmenistan – adept of self-isolation, idiosyncratic and unreliable as long as
it’s not dealing with China – is a mystery concerning how much natural gas it
really holds (the sixth largest or third largest reserves in the world?)
And the idea of committing billions of dollars to build a pipeline
traversing a war zone – from Western Afghanistan to Kandahar, not to mention
crossing a Balochistan prone to separatist attacks — is nothing short of sheer
lunacy.
Energy majors though, remain in the game. France’s Total seems to be in
the lead, with Russian and Chinese companies not far behind. Gazprom’s interest
in TAPI is key – because the pipeline, if built, would certainly be connected
in the future to others which are part of the massive, former Soviet Union
energy grid.
To complicate matters further, there is the fractious relationship
between Gazprom and Turkmenistan. Until the recent, spectacular Chinese
entrance, Ashgabat depended mostly on Russia to market Turkmen gas, and to a
lesser extent, Iran.
As part of a nasty ongoing
dispute, Turkmengaz accuses Gazprom of economic exploitation. So
what is Plan B? Once again, China. Beijing already buys more than half of all
Turkmen gas exports. That flows through the Central Asia-China pipeline; full
capacity of 55 billion cubic meters (bcm) a year, only used by half at the
moment.
China is already helping Turkmenistan to develop Galkynysh,
the second largest gas field in the world after South Pars.
And needless to add, China is as much interested in buying more gas from
Turkmenistan – the Pipelineistan way – as from Iran. Pipelineistan fits right
into China’s privileged “escape from Malacca” strategy; to buy a maximum of
energy as far away from the U.S. Navy as possible.
So Turkmenistan is bound to get closer and closer, energy-wise, to
Beijing. That leaves the Turkmen option of supplying the EU in the dust – as
much as Brussels has been courting Ashgabat for years.
The EU pipe dream is a Pipelineistan stretch across the Caspian Sea. It
won’t happen, because of a number of reasons; the long-running dispute over the
Caspian legal status – Is it a lake? Is it a sea? – won’t be solved anytime
soon; Russia does not want it; and Turkmenistan does not have enough
Pipelineistan infrastructure to ship all that gas from Galkynysh to the
Caspian.
Considering all of the above, it’s not hard
to identify the real winner of all these interlocking Pipelineistan power plays
– way beyond individual countries; deeper Eurasia integration. And so far away
from Western interference.
By Pepe Escobar
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