AFGHANISTAN: Oil Execs Revive Pipeline From Hell

Oil companies have dreamed of a trans-Afghan pipeline. Are they crazy enough to pull it off now?
Publisher Name: 
Forbes.com

It has been called the pipeline from hell, to hell, through hell. It's a
1,270-kilometer conduit, 1.2 meters in diameter, that would snake across
Afghanistan to carry natural gas from eastern Turkmenistan--with 700 billion
cubic meters of proven reserves--to energy-hungry Pakistan and beyond.
Unocal of the U.S. and Bridas Petroleum of Argentina vied for the $1.9
billion project in the 1990s. Now, with the collapse of the Taliban, oil
executives are suddenly talking again about building it.

"It is absolutely essential that the U.S. make the pipeline the centerpiece
of rebuilding Afghanistan," says S. Rob Sobhani, a professor of foreign
relations at Georgetown University and the head of Caspian Energy
Consulting. The State Department thinks it's a great idea, too. Routing the
gas through Iran would be avoided, and Central Asian republics wouldn't have
to ship through Russian pipelines.

But like everything else in Afghanistan, the unbuilt pipeline is already
scorched by history. Bridas made a stab at construction in the 1990s, says
Ahmed Rashid, a Pakistani financial journalist who recalls bumping into
Carlos Bulgheroni, Bridas' chairman, leaving a meeting with Taliban leaders
in Kandahar in early 1997. Later that year Unocal formed a consortium to
build the pipeline. (Bridas sued the California oil giant for stealing its
idea but lost.) Unocal mixed it up with tyrants, too, flying a delegation of
Taliban officials to its engineering headquarters in Houston, Texas, and
taking them on a side trip to the NASA Space Center.

It gets uglier. The Taliban lusted after the $25 million a year in would-be
pipeline royalties. Such a prize leads William O. Beeman, a professor at
Brown University who's an authority on Central Asia, to conclude that Osama
bin Laden's bombings in 1998 of U.S. embassies in Africa were designed to
nip the budding relationship between the Taliban and Western interests. "Bin
Laden didn't want the Taliban to be in bed with the U.S.," he says. "It
would have made his position untenable."

A spokeswoman for Unocal insists that the company never considered building
the pipeline under an illegitimate regime and is no longer interested in the
region.

Still, the potential bounty of delivering $700 million or so of gas each
year is bound to tempt someone, even if Afghanistan's new interim government
and old warlords don't bury the scimitar.

At least whoever picks up the challenge needn't worry about the Afghans'
blowing the thing up. Unocal studied the problem extensively and concluded
that, with the exception of Colombia, rebels in war-torn countries don't
destroy key elements of the economic infrastructure. That's true even in
Afghanistan, where a series of dams and hydroelectric plants built with
American support in the 1950s and 1960s have survived two decades of almost
constant warfare.

Demolishing giant sculptures of the Buddha is one thing, sabotaging
royalties quite another.

AMP Section Name:Energy
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