TAPI Moving Ahead: Dreams And Realities – OpEd

Turkmenistan President Gurbanguly Berdimuhamedov received a warm welcome last Wednesday as he arrived on a two-day official visit to Pakistan. His visit has provided a good opportunity to review the decisions taken during last two visits of the Premier Nawaz to Turkmenistan in 2015 as well as exchange views on bilateral, regional and international issues of mutual interest.

The visit is being considered significant as both countries are set to review progress and security of the 1,814 km-long Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project. Mobeen Saulat, the CEO Inter-State Gas Systems (ISGS) said that work on the project will be started from January 2017 and is likely to be completed by 2019.TAPI is moving on the fast track towards the right direction and now the second phase of feasibility, security of the pipeline, and removal of mines from the TAPI route is underway. Pakistan has played a key role in bringing the TAPI on track.

Earlier in December 2015 the leaders from Afghanistan, India and Pakistan, converged in the ancient city of Mary, 311 km from the capital Asghabat, to launch the mega project. TAPI will carry gas from Turkmenistan’s Galkynysh field having 16 trillion cubic feet of gas reserves, the pipeline will run to Herat and Kandahar provinces in Afghanistan, before entering Pakistan. In Pakistan, it will reach Multan via Quetta before ending at Fazilka in India.
From Pakistan’s perspective the project is not only a gas pipeline, but also a precursor in making it a trade and transit corridor. Such a corridor could comprise gas pipelines, roads, electricity transmission and fiber optic lines besides economic zones connecting Pakistan with Turkmenistan. Both leaders heap the greatest praise on TAPI, extolling its potential to lead to greater regional integration, energy security and job growth.

This pipeline, if completed, is supposed to carry 33 billion cubic meters of gas from Turkmenistan to the Indian border. According to The Nation, Berdimuhamedov said “The gas line will bring warmth and cordiality, and generate economic activity, create job opportunities and improve the living standards.” On the Pakistani side, gas from Turkmenistan will help mitigate the country’s significant energy deficit.

A company was registered in November 2014 in which, from India’s side, state-owned GAIL India Ltd was to pick 5 per cent stake in the international consortium, whereas from Pakistan side Interstate Gas Systems (ISGS) and Afghanistan’s Afghan Gas Enterprise (AGE), were to take 5 per cent stake each in the project and the remaining 85 per cent stake is held by Turkmenistan.

The investment agreement pertains to the 5 per cent shareholding of each of the three gas-importing countries, which means an initial investment of around USD 200 million.

But Kabul is now willing to take only 1.5-4 mmscmd so the share of Pakistan and India will go up to 43-44.25 mmscmd each. The TAPI pipeline will have a capacity to carry 90 million standard cubic metres a day (mmscmd) gas for 30 years. India and Pakistan were originally to get 38 mmscmd each while the remaining 14 mmscmd was to be supplied to Afghanistan.

On December 13, 2015 Turkmenistan began work on the 214 km section of the pipeline in its territory. The pipeline will travel 773 km in Afghanistan and 827 km in Pakistan before touching the Indian border. Pakistan is keen to “fast-track” construction. Many regional watchers are deeply doubtful of either target date. Pakistan is very hopeful on TAPI, despite the continuing instability in neighboring Afghanistan, through which the pipeline must pass. The visit marks Sharif’s third meeting with Berdimuhamedov in the past nine months. He attended the TAPI groundbreaking in December and in late May 2015, Ashgabat was the penultimate stop on his Central Asia tour.

Terrorism made its usual appearance in discussions between two leaders. The Associated Press of Pakistan reported that Sharif said, “This menace also undermines our endeavors for socio-economic development. We have to work collectively to eradicate the scourge of terrorism and extremism.”

The challenges regarding TAPI are chiefly financial and security in nature. The issue is not whether the project is specifically possible or greatly needed. For example, construction on Turkmenistan’s internal East-West pipeline started in 2012 and the 773-kilometre pipeline completed construction in late 2015 and became operational this month. The Central Asia-China pipeline, running 1,833 km from Turkmenistan to Xinjiang (running north through Central Asia), began construction in 2007 and was completed by 2009. The factors that continued to hamper expansion of trade were lack of direct cargo links, safe and direct land routes, knowledge of Pakistani products and visa facilitation. Efforts are being made to overcome these challenges and strengthen trade ties with special focus on enhanced market access, trade promotion and trade facilitation

However, pipelines need financing and TAPI’s finances have been suspect–the pipeline is estimated to carry a cost of at least $10 billion. As noted in a Reuters article from December, “TAPI’s construction is led by state gas firm Turkmengas and none of global energy majors have so far committed to the project that will cost as much as a third of Turkmenistan’s total 2016 budget.” Turkmengas is said to be putting up 85 percent of construction costs. Dubai-based Dragon Oil is reported to be in talks with Turkmenistan to join the project, but there hasn’t been an update on that front since late November.

Security in Afghanistan is still the biggest hurdle to TAPI’s completion. Given Afghanistan’s current security environment, Taliban present a serious obstacle to the project’s completion. Certainly Turkmenistan will construct its piece of the pipeline, but there are many more miles to go before Pakistan and India can benefit from Turkmen gas. Security in northern Afghanistan, and especially along the Turkmen-Afghan border, remains a massive wild card. And while Turkmenistan declined Russia’s aid in beefing up border security, that move doesn’t necessarily offer as much confidence about the current state of affairs in the region as Ashgabat may have wanted. Afghan President Ashraf Ghani has said that the country will put together a 7,000-strong force and that it would begin clearing the route in April.

Berdimuhamedov’s visit to Pakistan still needs clarification is how the pipeline will be protected, during construction or after? Pakistan steadfastly wants early completion of Turkmenistan Afghanistan-Pakistan-India TAPI gas pipeline project because it considered it a new chapter in economic collaboration and greater regional integration with Central Asia. Pakistan is ready to provide any assistance to expedite the implementation of TAPI project and help minimize its cost.

The strategic environment is still hostile to the TAPI dream, until and unless peace restoration in Afghanistan, Afghan government is not in opposition to provides security to TAPI. But at the same time operation zarb-e-azb the internal law and order situation in Pakistan is much improved. Dust surrounded the project over came clearer after US gave a green signal after Kerry visited the Ashgabad last year. These are signs of improvement to set up the TAPI project. It is essential for the TAPI members to work strenuously for the project implementation at the earliest in order to convert a dream into reality as it would help integrate the four member states by linking the energy-rich Turkmenistan with the energy-starved South Asia.

* The writer works for the Strategic Vision Institute, Islamabad and may be reached at [email protected]