A project to pipe gas from Turkmenistan to India via Afghanistan and Pakistan has been years in the pipeline. How soon will it light up homes?
A project to pipe gas from Turkmenistan to India via Afghanistan and Pakistan has been years in the pipeline. How soon will it light up homes?Another deadline has passed in ambitious plans to transport Caspian Sea natural gas from Central Asia to South Asia, a distance of 1,640 kms. Preliminary technical work on the Turkmenistan-Afghanistan-Pakistan-India (TAPI) Pipeline Project was meant to start in 2012. A year later there is ambiguity about progress.
Authorities in the Ministry of Mines and Industry say that disagreement with Turkmenistan over the transit fee for the gas is among the reasons for the delay.
The project was set rolling under the Taleban government. In 2002, representatives of the four countries met in Turkmenistan. Eight years later, the presidents of Turkmenistan, Afghanistan and Pakistan and the Indian energy minister signed the agreement. The Asian Development Bank is the biggest investor in the TAPI project.
By 2016, the pipeline was expected to get Pakistan 1.3 billion cubic feet of gas a day at a price equivalent of about 70 percent of Brent crude oil (bcfd). India too will get 1.3 bcfd and Afghanistan 0.5 bcfd.
The project should have been implemented in three phases. The first was from 2012-14; the second phase, which was the lining up of the pipes from 2014-16; and the transmission of gas in 2016.
Price tussle
Engineer Amirzada Khosti, specialist of exploration of oil and gas mines in the Ministry of Mines and Industry, explained that the project could be interminably delayed if Afghanistan and Turkmenistan cannot agree on a transit price. Turkmenistan has settled the price issue with both Pakistan and India. “The price specified by Turkmenistan is more than 20 cents (million British thermal unit – mmbtu) which is higher than the standard international price. We did not accept the price. If the government of Turkmenistan does not decrease the price then Afghanistan will not buy,” he said flatly.
Turkmenistan reckons that the price of gas it levies on Afghanistan will be higher than for Pakistan and India as the latter two countries will be paying for gas passing through Afghan territory.
According to Khosti, the Indian government has requested a meeting in Ashgabat at the end of February. The Afghan Ministry of Mines and Industry has not replied to the invitation.
On Feb 7, the Indian cabinet gave its approval for the TAPI project, and permitted the public sector GAIL India Ltd., to join the Special Purpose Vehicle (SPV).
The formation of the SPV was decided at the 16th steering committee meeting of all four countries in September last year. The SPV would consider the feasibility study and design work of the TAPI pipeline, and search for a consortium leader in the future.
Security cover
Securing the pipeline carrying natural gas from terrorist attacks would be its biggest challenge.
Sultan Mohammad Awrang, a former member of parliament, says, “The current situation of instability has limited the ground for investment. If security is not ensured the work on this project will not start.”
Officials in the Herat Chamber of Commerce & Industries have welcomed the project but they are doubtful if it will take off. Hamidullah Khadem, the head of the industrialists association in the province, thinks the end of the war would signal the start of the project.
Meanwhile, Amirzada Khosti dismisses concerns about security saying the government of Afghanistan has promised protection for the project.
Mohammad Yunus Rasooli, deputy governor of Farah province, insists that security for the pipeline will also solve all the problems of insecurity in his province.
Abdul Rauf Ahmadi, spokesperson of 606 Ansar Western Police, says, “The police in this zone are ready to take special steps to advance the pipe line project from Turkmenistan and act according to the order of the Ministry of Interior Affairs.”
Regional friction
Regional rivalries could also torpedo the project. While the four countries involved stand to gain, disagreements between them have also led to delays in the project, which was first conceived in the 1990s.
Amirzada Khosti of the Ministry of Mines and Industry wonders if the countries will be able to rise above their mutual suspicions to work together on the project. He says Iran tried very hard to change the route of TAPI, but the “countries agreed that the pipeline should pass through Afghanistan”. He said Tehran was continuing to persuade Pakistan to collaborate with Iran on a pipeline.
According to media reports, “Pipe of Peace” plans have been finalised, and an agreement was to have been signed with Pakistan on Feb 15. But it was postponed to Feb 27 following Pakistan’s request that the price of gas should be lowered.
For Afghanistan TAPI is a big development project with massive benefits to the economy and to security. Annually it could earn roughly 400 million USD on transit fees. Half a million people would get jobs during the construction of the project. The pipeline would pass through Herat, Farah, Helmand and Kandahar provinces.
