TAPI or Not TAPI: That Is the Question for Total
As delegates from the four countries hoping to build a gas pipeline from Turkmenistan to South Asia met on February 11 in Islamabad, Pakistani media claimed that a deal is close. Several outlets reported that French energy major Total may lead the long-delayed project, providing much-needed know-how and capital.
Other than rumored ambivalence towards the Turkmenistan-Afghanistan-Pakistan-India pipeline project in Islamabad and Delhi, the lack of a major commercial investor has been a key obstacle for TAPI. Turkmenistan’s refusal to allow any outsider an equity stake in an upstream field has been another stumbling block, with India reportedly pressuring Turkmenistan on February 11 to change its mind.
But The Daily Times, a Pakistani newspaper, claims a deal is imminent. Citing an unnamed official in the Pakistani Ministry of Petroleum and Natural Resources, the newspaper clarified that Total would not be the owner of the pipeline – which is the privilege of a company created by the four countries called TAPI Ltd. – but would instead assist the Turkmen at the source:
Under a proposed deal, Total will help extract gas from Turkmenistan’s fields, which will be exported to Afghanistan, Pakistan and India. In return, the company will be paid a service fee in cash or in kind. Sources in the energy sector said that gas companies of the four countries have already established a company to build, own and operate the 1,800km TAPI natural gas pipeline. The four state-owned companies will hold an equal share in the pipeline operator.
Afghanistan’s Tolo News was less upbeat in its February 10 report on the steering committee meeting, reporting that “one of the likely candidate companies is said to be France's Total.” Before this month, news outlets were reporting interest from other majors such as Exxon Mobil and Chevron in addition to Total, while on February 8 India’s First Post claimed that Total was totally out of the picture:
An experienced international company is needed to head a consortium of national oil companies of the four nations in the TAPI project but little concrete progress has been made in this regard after the French giant Total SA lost interest in the project as Turkmenistan refused to accept its condition of a stake in the gas field that will feed the pipeline.
For its part, Total has been silent on the pipeline and there was no mention of the company at the meeting, where the four countries formally re-endorsed their commitment to TAPI.
According to the Asian Development Bank, which acts as a facilitator, the 1,800-kilometer TAPI project could transport up to 33 billion cubic meters of Turkmen gas per year, largely to India and Pakistan. Delays to the project, which was first mooted in the 1990s, have seen the price skyrocket from $3.3 billion to $7.6 billion or even, according to one Pakistani report today, $10 billion.
Beyond the delicate issue of who owns the Turkmen gas fields, the pipeline would have to cross the violent badlands of southern Afghanistan.