<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[<p>Think of it as the New Silk Route: a gas pipeline from the Amu-Darya Basin in Turkmenistan, near the ancient town of Daulatabad (which is on the other side of the fence in Iran) to the sleepy town of Fazilka on the Sutlej river in Punjab (India). Covering 1,680 km, it will pass through a beautiful green belt in Turkmenistan, enter Afghanistan and run along with the newly constructed Kandahar-Herat highway. From the desert of south Afghanistan, it enters Pakistan near Quetta, touches the green pastures in Multan before finally reaching Fazilka. Romantic as it sounds, it will probably remain in the imagination.<br><br>The agreement for the Turkmenistan-Afghanistan-Pakistan-India (Tapi) project has been signed between the partners for laying the pipeline and sale of gas, but the logistical and security concerns seem insurmountable. In south Afghanistan, the Taliban is still active. Baluchistan and south Punjab in Pakistan are disturbed areas with threat from fundamentalist. The Afghan government is deploying 7,000 security personnel along the route, and Pakistan has made similar assurances, but trust is hard to come by.<br><br>Asian Development Bank (ADB) chief Haruhiko Kuroda said the project would be hard to complete. Security and high-quality construction work is mandatory for funding by the finance institutions. But there are others who have a great interest in its success. Tapi is also a dream for the US, to be able to bring gas out of Central Asia without going through Russia or China (Turkmenistan already has gas supply pipelines to Iran, Russia and China). In theory, this offers some comfort in security terms. Turkmenistan is important to world energy markets because it contains over 100 trillion cubic feet of proven natural gas reserves.<br><br>For Afghanistan, the economic benefit — roughly $1.4 billion in transit fees from India and Pakistan — could be huge. The pipeline is expected to cost $3.3 billion, with an annual throughput of 33 billion cubic metres of gas. India may sign a gas purchase agreement with Turkmenistan in February 2011 when their oil minister Bayramgeldi Nedirov visits Delhi.<br><br>But the costs for India may be too high. Officials at the petroleum and natural gas ministry estimated the landed cost in Punjab at $10 per unit, compared to around $7-8 that customers pay for gas from Reliance Industries' KG Basin, though less than the $12 some buyers pay for imported liquefied natural gas. Besides, current agreements have a commitment of 13.4 billion cubic metres of gas that would be provided regardless of circumstances.<br>Cost aside, the government is confident there will be no security risk — as was with the Iran-Pakistan-India (IPI) pipeline. Tapi is backed by the US and the ADB. Despite that, India has pushed for an inter-government agreement, to have clarity and ensure a minimum supply.<br><br>But there is a trust deficit in governments, especially in relation to Pakistan. The IPI has almost been shelved since the Mumbai attacks. There is an embargo on any talks with Pakistan currently. Memories of how the Myanmar-India pipeline was stopped by the Chinese — who have considerable influence with the military junta — are still fresh. So here's the question: should we continue to invest time and money into the project, or give it up as a lost cause?<br><br>(This story was published in Businessworld Issue Dated 03-01-2011)</p>