Oil Chiefs In Ashgabat Pitch Plans For Pipeline

ASHGABAT, Turkmenistan -- International oil barons seem ready to brave anything from Afghan rebels to vast deserts in their quest for a share of the world's third-largest gas reserves.

But the toughest hurdle may be the first one: persuading the Turkmen government that they can get the gas safely and profitably to the outside world.

The effort brought many oil executives last week to Ashgabat, Turkmenistan's capital, where they pitched competing pipeline proposals aimed at unlocking reserves estimated at 13 trillion cubic meters.

They showed their hosts satellite pictures and computer simulations -- but none could offer the safe, quick road to riches many of the country's 4 million people envisioned when they broke from the Soviet Union in 1991.

Those hopes were largely dashed when Russia cut access to the only pipeline to hard-currency markets, and now the race is on for rights to develop an alternative.

Unocal of the United States appeared to have an inside track. It skipped the conference for vodka toasts with Turkmen President Saparmurat Niyazov and Rem Vyakhirev, chairman of Russia's gas monopoly Gazprom. Unocal proposes a 1,400-kilometer pipeline with an annual capacity of 20 billion cubic meters, along with an oil pipeline, through Afghanistan to Pakistan.

It would have to cross a war zone controlled by Afghan rebels. "Project financing at this stage probably isn't feasible," said Marty Miller, vice president of Unocal. "Hopefully, the political situation will change."

Equally daunting may be Gazprom, which owns 46 percent of a joint venture with Turkmenistan for much of the country's exports and has de facto veto power over other projects. Many experts expect Gazprom to oppose any pipeline that will loosen its grip.

Iran and Turkey propose to take as much as 27 billion cubic meters of gas per year south through their countries to outside markets. Turkmen officials support this route, but none could say how they would finance it, especially with a U.S. boycott of Iran giving pause to Western investors.

A third route, proposed by U.S.-based Oil Capital and the Turkish pipeline company Botas, would cross the bottom of the Caspian Sea to Azerbaijan, and on through Georgia or Armenia to Turkey. The route would be short but expensive, and Turkmen Oil Minister Amangeldy Esenov said it crosses too many countries.

Such wisdom could doom a study by Exxon Corp., Mitsubishi Corp. and China National Petroleum Corp. for a pipeline of up to 8,000 kilometers through Central Asia and China to Japan or South Korea.

"It's just a matter of time before it all explodes and opens up," one Western diplomat said. "A pipeline will be built. The market is there. The will is there. But which one? It's completely up in the air."