TAPI: High Hopes

The Ministry of Mines and Petroleum has announced a fresh deadline for TAPI, the natural gas pipeline from Turkmenistan to India.

Construction would start in two months, ministry spokesman Mohyadun Noori said.

The Ministry of Mines and Petroleum has announced a fresh deadline for TAPI, the natural gas pipeline from Turkmenistan to India.

Construction would start in two months, ministry spokesman Mohyadun Noori said. This prospect holds out hopes of greater regional security and for Afghanistan, thousands of jobs on the pipeline that links four partnering countries in the region. The project name, an acronym of the first alphabet of the partners, Turkmenistan, Afghanistan, Pakistan and India, has been 23 years in the making.

The several missed deadlines have been the result of security concerns and the partners’ inability to set aside self-interest. It was only last November that TAPI countries established a company to “build, own and operate” the pipeline – a sign of their intent to enhance energy security in the region. The Asian Development Bank was appointed the transaction adviser for the project but their search for a firm that could lead the consortium of four state companies has not gone far. Instead at a steering committee meeting in August, Turkmen Gaz said it would be the leader and take a minimum 51 percent stake.

Ministry spokesman Noori said local companies would be given priority to implement the technical aspects providing they have enough capacity. The Afghanistan Chamber of Commerce & Industries has also appraised the participation of local companies in TAPI.

There are serious security challenges for the proposed 1,800-km pipeline through the provinces of Herat, Farah, Helmand and Kandahar before it enters Pakistan. The threats are both internal and from armed opponents of the government who are based in Pakistan. Observers hope Pakistan, which has as much or greater need of the natural gas, will ensure the project will run smoothly.

Yunus Negah, head of research at the chamber said that Pakistan is in more need than Afghanistan and India for gas. “The idea of TAPI resulted from the needs of Pakistan and India for energy,” he said. He said the pipeline would meet not just the “economic” needs but also force the partners to “jointly work for peace and stability and leave aside their enmities.”

Both Daud Shah Saba, Afghanistan’s minister of mines and petroleum and his Pakistani counterpart, Shahed Khaqan Abbasi, have assured their partners that the pipeline would be secure in their respective countries. “We are willing to cooperate for the implementation of the project, and work should start before new problems rise,” Minister Saba said in February this year.

The TAPI pipeline will export up to 33 billion cubic metres of natural gas a year from Turkmenistan to Afghanistan, Pakistan and India over 30 years. Once the gas starts to flow, Afghanistan would claim transit fees from Pakistan and India, roughly estimated at 400 million USD annually. The 56-inch diametre pipeline was expected to cost 7.6 billion USD three years ago. Revised estimates now put it at nearly 10 billion USD.

Economic situation

According to the Ministry of Mines and Petroleum, some 12 sub-stations will be constructed, five of these in Afghanistan. Afghan companies are being asked to bid to run these.

Negah from the Chamber of Commerce & Industries said TAPI has many “direct and indirect benefits” for the country. “There is a possibility that thousands of our countrymen would get jobs,” he said. “I think the long term and continual benefits of the projects are more beneficial than its short term benefits.”

Saba, the minister of mines and petroleum said, “We have got an initial agreement with Turkmenistan over security for the project, and also for estemlak (ownership of areas where the pipe passes), work and labour.”