Yesterday in Islamabad the leaders of Pakistan, Afghanistan and Turkmenistan met to revive the ambitious dream of building a £1.4bn gas pipeline to run from central Asia, through Afghanistan and down to the Arabian Sea off the southern Pakistani coast.
Few believe Afghanistan is secure enough to take such an expensive project. Most provinces are still ruled by rival warlords who often owe fickle allegiance to the government in Kabul. Any pipeline that is on or near the surface would be vulnerable to attack.
Yet the dream of a 930-mile pipeline that would carry 23bn cubic metres of gas a year and bring the Afghan government an annual £205m in transit fees alone is too good to resist.
"Now with the gradual return of peace and normality in Afghanistan, we are confident that this mega-project will be realised in the near future," said General Pervez Musharraf, Pakistan's military ruler. The prospect of a lucrative pipeline deal may yet be a key factor in encouraging the Islamabad regime to pull back from the threat of a devastating war with India, which could scuttle the plans as quickly as they have been revived.
Gen Musharraf signed a new agreement on the pipeline yesterday with Hamid Karzai, Afghanistan's interim leader, and Sapamurat Niyazov, the Turkmen president. The US oil giant Unocal has been looking at the project for the past decade, battling against an Argentinean rival, Bridas Corporation, which also hoped to win the rights. In the early days of the Taliban regime Unocal officials held meetings with the ultra-Islamic clerics hoping for their support, but with little success. Now Unocal's first feasibility study needs to be updated and the project has to be put out to tender and the funding secured.
Gas analysts warn the project would be vulnerable to disruption by warlords unless it was buried deep enough in the ground, which would add considerable extra costs. Already the size of the project means large industrial buyers would be expected to pay over the odds for the gas at first. Pakistan is hoping that the World Bank or the Asian Development Bank might step in and help finance the deal.
Gen Musharraf, his eyes clearly on the vast earnings and strategic importance oil and gas could bring Pakistan, is also looking at a second £2bn pipeline that would run from Iran through Pakistan into India. Although the Indian market offers a huge opportunity, the pipeline project would have to overcome five decades of hostility between the nuclear-armed India and Pakistan.
With the two nations threatening war, now seems an unlikely time to start talking about a pipeline. Yet senior Russian officials have visited Pakistan this month, ostensibly to talk about peace with India but also to push Gazprom's bid to build the pipeline. If Gen Musharraf is unable to build a peaceful relationship with India some have suggested bypassing Pakistan by building an underwater pipe from Iran round to India. That would cost Pakistan dear.
