Nearly 20 years in the making, Turkmenistan finally inked a 30-year gas deal with Afghanistan in a move that has brought the Turkmenistan-Afghanistan-Pakistan-India pipeline (TAPI) one step closer to realization. Delegates from the four participating countries attended the 17th meeting of the TAPI steering committee in Ashgabat reaffirming their commitment to the project, agreeing to form a company that will begin operating in September to execute it, and aiming to complete the pipeline network by 2017.
The proposed 1,700 km pipeline will run from the South Yolotan Osman fields in Turkmenistan to Afghanistan, and from there alongside the highway running from Herat to Kandahar, and then via Quetta and Multan in Pakistan; the final destination will be to Fazilka in Indian Punjab. The pipeline will be able to transport up to 30 billion cubic meters of natural gas annually from Turkmenistan to the participating countries and the agreement signed this week envisages the transport of 90 million cubic meters per day (mmcmd) of Turkmen gas, with deliveries of 38mmcmd to Pakistan, 38 to India, and 14 to Afghanistan.
The Asian Development Bank (ADB) has been appointed legal-technical consultant to the project and intends to identify a company to drive it. According to an earlier pre-feasibility study by Penspen, the estimated cost of the project is about $ 7.6 billion, however, more recent reports cite a $ 9-12 billion price tag. According to the ADB, the estimated design and construction period for the project is about four years.
Some analysts warn of the potential challenges the TAPI project has lying ahead, according to AFP, calling TAPI a “wildly ambitious pipedream,” given the continued instability in war-torn Afghanistan and strained relations between India and Pakistan. However, the project is championed by the US over a rival pipeline planned by Iran for energy-hungry Pakistan, for a number of reasons including keen interest by US oil majors, a desire to circumvent the Russian pipeline network, and the potential to bolster Afghanistan’s economy. Whereas Russia has traditionally been opposed, or at very least skeptical of the TAPI project, in 2012 it expressed interest in Investing in it.
TAPI potentially could be a “game changer” in regional geopolitics and regional economic integration. According to Professor Gulshan Sachdeva from Jawaharlal Nehru University (India), it has the potential to stabilize the situation in Afghanistan. Turkmenistan would benefit from directly linking 90 mmcmd of its gas reserves to a diversified South Asian market. TAPI would create job opportunities, boost Turkmenistan’s economy, and raise Turkmenistan's role as the Eurasian natural gas hub, opening another potential revenue stream, according to Oil and Gas Journal.
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