ISLAMABAD: The Turkmenistan–Afghanistan–Pakistan–India (TAPI) natural gas pipeline has been long aborning, but its prospects recently got a shot in the arm.
The 1100-mile and $10 billion project, which has seen numerous delays since the pipeline consortium, was announced in late 2014, though the project was first mooted in 1991, Oilprice.com reported.
Construction started in early 2018 with a projected in-service date of 2021, but halted later that year after workers clearing the route were killed by unknown assailants.
Also, the project’s $10 billion cost estimate is a decade old, and an update may cause further delay to the Asian Development Bank-funded effort that is now slated to resume work in September 2022. Turkmenistan will loan Afghanistan the funds for its share of the project, to be repaid from gas transit revenues.
Representatives of the government of Tajikistan recently met officials in Afghanistan, and the Taliban announcement that it will dedicate 30,000 troops to pipeline security may motivate the parties to start construction.
The completed pipeline will allow Turkmenistan to reduce its reliance on its biggest gas customer, China, which has recently taken most of Turkmenistan’s gas exports, though in 2021 the country doubled its gas exports to Russia, which used to be the biggest importer of Turkmen gas until it was displaced by China in 2010.
The pipeline will generate additional income that Ashgabat can use to improve services to citizens, a priority after the recent unrest in neighboring Kazakhstan.
For Afghanistan, the project would provide transit fees of about $500 million per year, along with an annual share of 500 million cubic meters of gas for the first ten years, ultimately increasing to 1.5 bcm per year.
For Pakistan, the pipeline would help solve the country’s persistent energy shortfalls, such as the deficit between current gas production of 4 billion cubic feet per day (BCFD) against demand of 6 BCFD. By 2025, gas production is expected to fall to less than 1 BCFD due to depletion of gas reserves while demand increases to 8 BCFD.
In late 2020, Pakistan and Russia signed a deal to complete the 700-mile Pakistan Stream Gas Pipeline, to move LNG from Port Qasim (Karachi) to Kasur. Pakistan may be dealing with Russia to balance against China, or maybe the deal was decided on strictly dollars-and-cents terms. Regardless, this project may crowd out attention and funding for Pakistan’s phase of TAPI.
A richer energy mix and pipeline transit revenues would strengthen Pakistan as it negotiates new efforts with China under the umbrella of the China–Pakistan Economic Corridor. Pakistan’s leaders will need to strengthen their position vis-à-vis China while demonstrating to Beijing they are a reliable partner that will develop energy resources that can accommodate China’s projects.
But first, those leaders must and take on entrenched business and national security interests to successfully support TAPI, despite the economic benefits to its neighbours.