July 3, 2002

by Aftab Kazi

India has sought the construction of an energy pipeline from Russia across Central Asia and China. This proposal shows the Indian wish to avoid energy dependence on Pakistan at any cost, despite the mounting energy needs in India. Although welcomed by Russia and China for further discussion, the feasibility of this pipeline project is highly doubtful for economic, technical, environmental, and security reasons. Whereas the idea could, if constructed, change the energy architecture of the region, it is highly unlikely to be endorsed by the Chinese government.

BACKGROUND: Last month in Islamabad, the leaders of Afghanistan, Pakistan and Turkmenistan agreed to revive interest in the construction of a 890 mile long, $2bn gas pipeline that was once initiated by UNOCAL and proposed as the ‘Centgas’ pipeline. This pipeline would connect the gas fields of Eastern Turkmenistan through Afghanistan to Pakistan’s Arabian Sea coast. Soon after the Agreement was signed, India’s ONGC (Oil and Natural Gas Corporation-Overseas) announced a counter-proposal “Energy Highway” to construct a Russia-China-India (RCI) pipeline. The new proposal, if feasible, would appear to undermine the otherwise thoroughly studied and most convenient Afghanistan-Pakistan oil and gas transit route. The RCI is supposed to stretch from Russia through Turkmenistan, Uzbekistan, Kazakhstan, to Kashgar in Chinese Xinjiang. It will enter Indian-occupied Kashmir via Ladakh, crossing the Siachen glaciers and the India-China Line of Control (or alternatively through Hamachal Pardesh) to supply gas to Northern India. During the Shanghai-6 conference in Almaty, delegates of Russia, Uzbekistan, Kazakhstan and China suggested that the viability of pipeline be studied. According to Indian ONGC officials, the economic and technical aspects of the proposal remain undetermined. The proposed pipeline would extend over an extremely long stretch of extremely varied terrain and may cost anywhere up to $15 Billion to build, or slightly less if connected through already operating pipelines. The Central Asian republics are interested in any proposal that promises an oil and gas exporting outlet. Russia and China, on the other hand, are likely to consider the broad geopolitical and security aspects before they would agree with the construction of any pipeline. Though potentially interesting for both India and the producing states to the North, the pipeline project’s feasibility is compromised by its anti-Silk-route design, the possible environmental damages resulting from it, security problems, the high economic cost of its construction and structural maintenance. This is especially true in the face of other cost-effective and more convenient short-cut alternatives that are readily available. IMPLICATIONS: Politically, the very long distance design of the RCI pipeline crossing over the India-China Line of Control and the glaciers that spread around Pakistan’s Karakoram, are likely to raise serious military security concerns by both China and Pakistan. Amid the ongoing political transition processes in countries that the pipeline must cross, the risks to the security of the pipeline cannot be discounted. The RCI pipeline, if constructed, would likely jeopardize or delay the prospects of another 3,000-mile pipeline – the Kazakhstan-China pipeline that is also planned to supply gas to Japan, as well as the chances of the Turkmenistan-Afghanistan-Pakistan pipeline. The shortest and economically most viable routes for oil and gas export from Central Asia are through Iran, Afghanistan, and Pakistan, by the historic Silk Routes and their connections. In spite of India’s serious energy needs to enhance its industrial infrastructure, domestic politics in India are complicating the picture. The ruling Bharatya Janata Party (BJP) government is decidedly opposing the more cost-effective Pakistani route due to hard-line perceptions of influential parts of the party elite that seem unwilling to accept the existence of the Pakistani state. Over the last five years, Pakistan has approved Iranian, Afghani and Turkmenistani proposals for gas supplies to India via Pakistan, hoping that economic interdependence might help reduce bilateral tensions between the nuclear-armed neighbors. However, India rejected an Iranian offer to supply gas through Pakistan. Foreign Minister Jaswant Singh traveled to Tehran only to communicate the Indian interest in an underwater pipeline through the Arabian Sea, bypassing Pakistan. Explaining the economic and technical complexities, Iranian foreign minister Kamal Kharrazi reiterated that Iranian gas supplies are possible only through the Pakistani route. This also explains Iran’s efforts to help calm down the current India-Pakistan tensions. The motivation behind the RCI proposal appears to be to avoid the Pakistani route completely. This objective is likely related to BJP’s electoral image crisis and its attempts to regain popularity by playing on Hindu nationalism. Slogans such as “Why pay Pakistan $600 million annually in pipeline transit fees” have been heard. More deeply, India’s frustration derives from its geographical location as a distant observer of Central Asian affairs, lacking common boundaries with the region, especially compared to Pakistan, which is the geographical South Asian gateway to the newly opened region. Economically, ONGC-Overseas is aiming to seek at least 20 % stake for India in oil and gas fields in Uzbekistan along with LUKoil and Gazprom. ONGC nevertheless remains frustrated with pipeline routes. Nevertheless, even the OGNC leadership, which has not yet studied the economic and technical aspects of the proposals, is worried about the feasibility of this pipeline. India may be relying on Russia and Uzbekistan to try to convince China to grant a pipeline corridor. The financing of the pipeline is another issue. Given the proposed or ongoing construction of several other lines around the Caspian sea (such as the Baku-Ceyhan pipeline) and in China, it is unlikely that major oil corporations would be interested to invest in the RCI pipeline, thereby undermining their investment in other projects. Even to local Indian financers, the nature of the project, crossing over so many countries and the Line of Control, is costly and risky, making profitable returns questionable. Environmentally, in addition to the normal damage that pipeline construction endures, the RCI’s construction through the glaciers near the Pakistan-China border could cause serious environmental harm. The consequences of an alteration in the Siachen glaciers could cause environmental water problems beyond floods and hurricanes all over South and parts of Central Asia. The impact may be felt further away, as environmental degradation of these important glaciers could destabilize sea water levels, hurting the Himalayan habitat and northern polar areas. CONCLUSION: While the RCI pipeline idea may be appealing, it is neither viable nor feasible. It is highly unlikely that the Chinese government would grant India a pipeline corridor across the line of control on the China-India border for security reasons. India’s hosting of the Tibetan government-in-exile and its socialization with Uyghur nationalists, as well as India’s nuclear military strategy to confront China, are taken seriously by the Chinese leadership. Ever since 1992, China has consistently denied Indian requests for a corridor to construct an India- Central Asia railway line through Western China, chiefly for these security reasons. Therefore, Indian requests for the construction of the RCI pipeline through Xinjiang are likely to be rejected. AUTHOR BIO: Dr. Aftab Kazi is a fellow with the Central Asia-Caucasus Institute, Johns Hopkins University-SAIS and with the Institute of Political Science, Leipzig University. He is currently writing a book on U.S.-Central Asian relations since independence.