TAPI (Turkmenistan-Afghanistan-Pakistan-India Pipeline) is a project that is being seen by some as a US backed effort to reduce Russian influence in energy-rich Central Asian states. While the supporters of the project are hopeful that the pipeline will establish regional cooperation, the geo-political backdrop, inherent security issues and financial problems can hinder its actual realization
ATIF SHAMIM SYED | Special to Caravan Daily
[dropcap]C[/dropcap]onstruction on the Turkmenistan–Afghanistan–Pakistan–India Pipeline (TAPI), also known as Trans-Afghanistan Pipeline, began on December 13, 2015. The $10 billion project will transport natural gas from Turkmenistan through Afghanistan and Pakistan into India. The gas pipeline is expected to become operational by 2019. Some observers have likened the TAPI project to a modern-day equivalent of the ancient Silk Road.
The foundation of TAPI was laid in 2010 in the capital of Turkmenistan, Ashgabat, with the signing of an agreement during a summit between the presidents of Turkmenistan, Afghanistan and Pakistan, and the Oil and Natural Gas minister of India. TAPI is also favored by Americans as a substitute for the Iran-Pakistan-India (IPI) gas pipeline. India was initially part of the IPI project but chose to opt out in 2009 citing issues regarding security and pricing. In 2014, Pakistan also shelved the idea stating international sanctions against Iran as the main reason.
The TAPI pipeline is geopolitically very significant because it is set to traverse areas that are fraught with deep-rooted political and economic problems. Both Afghanistan and Pakistan will not merely act as transit routes, but will also share the gas being transported through their territories. The pipeline will be 56 inches in diameter. Its capacity will be 33 billion cubic meters of gas per year.
Out of this, both Pakistan and India will get 14 billion cubic meters each while Afghanistan will get 5 billion cubic meters. The pipeline will start from the Galkynysh gas field in Turkmenistan. It will pass through Kandahar and Herat in Afghanistan, Quetta and Multan in Pakistan, and conclude in Fazilka situated in the Punjab province of India.
Afghanistan is very hopeful about the success of the TAPI project despite the volatile security situation within the country and a renewed Taliban insurgency. Kabul is eyeing hundreds of millions of dollars in transit fee alone. Successful completion and operation of the TAPI project will also attract international investors and help alleviate the ever-worsening economy of Afghanistan. It will also reduce Afghanistan’s energy dependence on Iran.
Turkmenistan possesses the fourth largest gas reservoir in the world. India, with an expanding economy, has great appetite for energy. The TAPI project is mutually beneficial for both countries since it will cover almost 60 percent of India’s energy needs. Moreover, India is also viewing the project as an opportunity to counter the ‘one road, one belt’ policy introduced by China.
Proponents of the TAPI project are hoping that it will not only transport natural gas, but also establish and strengthen economic connections between the member countries. Currently, Pakistan and India are locked in perpetual border disputes while the two sides of the Durrand line are also restive for the past few decades.
Some observers have cited serious concerns regarding the security situation within Afghanistan and whether it will allow the construction of the pipeline that will pass through some of the most dangerous parts of the country. Keeping this in view, India is considering swap agreements that would enable Turkmenistan to transport its gas to a third country that would send it to India through its own channels. India will make the payment for gas to Turkmenistan.
Financing for such a gigantic project is also a problem. Turkmenistan does not allow foreign companies to invest in its gas fields which automatically excludes participation of famous energy giants. TurkmenGaz will most probably lead the consortium. Pakistan, India and Afghanistan will be represented through Inter State Gas Systems, GAIL and Afghan Gas Enterprise respectively as shareholders. However, none of these companies currently possesses the resources to undertake such a large project. When completed, TAPI will become one of the largest pipelines in the whole world. Moreover, finding an investor willing to put money in Afghanistan will be a major problem.
Turkmenistan is a land locked country whose economy is dependent on sales of natural gas. Presently, it has very limited routes available for exporting gas. TAPI will allow Turkmenistan to diversity its export routes and penetrate into new markets. Since Russia is the main buyer of Turkmen gas, it is in a position to dictate its own price for the Turkmen product. Establishment of parallel supply routes and expansion of its consumer base will allow Turkmenistan to raise the price. That is why Russia is viewing the TAPI project as a threat to its regional hegemony.
TAPI is a project that is being seen by some as a US backed effort to reduce Russian influence in energy-rich Central Asian states. While the supporters of the project are hopeful that the pipeline will establish regional cooperation, the geo-political backdrop, inherent security issues and financial problems can hinder its actual realization. The next four years will decide whether the TAPI idea turns into a reality or becomes a futile pipe dream.