Plans for the TAPI gas pipeline, as the Turkmenistan-Afghanistan-Pakistan-India project is called, received an impetus with the September 20 meeting of the energy ministers of all four countries in Ashgabat, Turkmenistan. The decision to rope in a private global energy company to execute and manage the pipeline may provide the necessary impetus to start the project.
Plans for the TAPI gas pipeline, as the Turkmenistan-Afghanistan-Pakistan-India project is called, received an impetus with the September 20 meeting of the energy ministers of all four countries in Ashgabat, Turkmenistan. The decision to rope in a private global energy company to execute and manage the pipeline may provide the necessary impetus to start the project.
The pipeline has been enmeshed in the regional geopolitics since its inception in 1995 when it fell prey to the politics of the major oil companies especially the American company UNOCAL and the Argentinean oil giant Bridas. While UNOCAL pushed for a united government under the Taliban, Bridas negotiated with different tribal groups for safe passage of the pipeline. UNOCAL, with powerful lobbyists like Zalmay Khalilzad(who went on to become the U.S. ambassador to Afghanistan post-2001) won out and signed an agreement with Taliban. Implementation remained elusive and the agreement finally broke down with UNOCAL withdrawing from the project. Since 2001, the project has been revived but remained on the drawing boards due to the instability in the country.
The fluctuating nature of the bilateral relationship between India and Pakistan has also prevented quick movement on the much-needed project. Initially pegged at $3.3 billion, it is now estimated at $7.6 billion to be funded by the Asian Development Bank. Now the decision of the four countries to rope in a private oil company to run the project may kick start its implementation.
Turkmenistan, which has been pushing for the project to get underway as a means of diversifying its sales, has offered to help in efforts to achieve peace and reconciliation in Afghanistan. Recently both Pakistan and Afghanistan guaranteed the security of the pipeline, though it is not clear how this will be achieved. However if the project does get underway, it could be a cornerstone for changing political relationships in the region. The economic impetus of the project will require each of the participating countries to be vested in the peace and stability of the other three.
Demand for gas
India dominates the demand for gas in the region with a population of 1.2 billion. Indications are that current imports will fall far short of expanding demand unless India diversifies its supply sources by 2015. Pakistan itself will benefit both from the supply of gas which it will tap into, as well as the fees it will levy for its transit into India. Politically Pakistan stands to gain strategic leverage if it has control over a vital source of fuel energy for India.
Turkmenistan has more than 8.5 trillion cubic metres of gas and is one of the world’s richest gas sources after Russia, Qatar and Iran. It has already signed several international agreements for the supply of gas to China, Iran and Russia so far.
The TAPI pipeline, which will be 1680 kms long, will originate in the Daulatabad gas field in southeast Turkmenistan. Around half its length will be through Afghanistan where it will pass through the Herat and Kandahar provinces before entering Pakistan in Baluchistan, passing through Quetta and Multan to end in the border town of Fazilka in the northern Indian province of Punjab.
Benefits for Afghanistan
As part of this agreement Afghanistan will receive 5 billion cubic meters of gas free per year and earn approximately $300 million in revenue. In addition the pipeline is expected to generate anything between 9000 to 20,000 job opportunities for Afghans.
Iran, which shares a 900-km border with Afghanistan has been trying hard to get the gas pipeline through its territory, but as the route through Iran is longer and more costly, both Turkmenistan and Afghanistan have a preference for the shorter and less expensive route. Turkmenistan hopes to sign off on the agreement for execution of the project by December in a meeting of the heads of State of all four countries.
Security remains the biggest challenge, stalling several economic projects in Afghanistan. These include the delays in the mining in the Aynak copper mines, the dam projects on the Kunar river, Kamal Khan dam in Nimroz, Bakhsh Abad dam in Farah, the building of 14 airports in different provinces, the railroad from Torkham Port to Hairatan Port and the bidding process on the Hajigak mine.
If the TAPI project gets postponed again it is likely that both Turkmenistan will find an alternative buyer, and India and Pakistan, the consumer countries, will find alternative suppliers, with Afghanistan losing the chance to earn revenue and create jobs.
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