Turkmenistan Signs TAPI: Now What?
After almost a generation of endless speculation, Ashgabat has finally signed an agreement to ship natural gas to South Asia, Reuters reports.
Turkmengaz, Turkmenistan's state gas monopoly, signed the agreement to supply Afghanistan, Pakistan and India via the long-stalled TAPI pipeline during an annual gas congress in the Caspian Sea resort town of Avaza (TAPI is an acronym for the four countries the pipeline traverses).
Long a sticking point, Ashgabat has demanded all its gas be sold at its border, ensuring payment before the gas moves out of its control.
Turkmenistan – which has one of the world's largest gas reserves including the second largest field, Galkynysh (“Revivial”) – is seeking to diversify exports to break its dependence on sales to Russia and a network of pipelines largely controlled by Moscow. In 2009, Turkmenistan began exporting some gas to China.
TAPI would stretch 1,735 kilometers and alone carry 33 billion cubic meters (bcm) of natural gas a year, more than doubling Turkmenistan’s current exports of roughly 20 bcm per year. The country aims to export 180 bcm by 2030.
But endless war in Afghanistan may still prove a major impediment.
A hefty part of the project – 735 kilometers – will cross through Afghanistan’s restive southern provinces, which are soon to be handed over to the country’s feeble security forces as NATO forces prepare to withdraw from the country. A US official predicted in March that TAPI could cost around $10-12 billion to construct. There are rumors that Russia may help fund the project, as well as two US oil companies that have yet to be named, according to Reuters.
Should construction get off the ground, Pakistan and India both stand to import 38 million cubic meters per day (mcmd) by 2018. Another 14 mcmd would go to Afghanistan.
So Turkmenistan, finally, has inked a deal. But TAPI’s future remains a long, uncertain road.