ALL ABOUT TAPI PROJECT

ABOUT :-

The Turkmenistan-Afghanistan-Pakistan-India (TAPI) Pipeline is a natural gas pipeline which is set to cross over 1,700 km in its journey from Turkmenistan to India. 

Drawing gas from the world’s second largest natural gas field of Galkynysh (Turkmenistan) that holds gas reserves of 16 trillion cubic feet, the pipeline will run to Herat and Kandahar province in Afghanistan, before entering Pakistan. In Pakistan, it will reach Multan via Quetta before ending at Fazilka (Punjab) in India.

With its groundbreaking ceremony finally taking place recently on Dec 13, 2015 and implementation soon to follow, it is hoped that the project would get operationalised by December 2019.

The TAPI pipeline will have a capacity to carry 90 million standard cubic metres a day (mmscmd) gas for a 30-year period. 

India and Pakistan would get 38 mmscmd each, while the remaining 14 mmscmd will be supplied to Afghanistan. However, with Afghanistan agreeing to take approx 1.5-4 mmscmd against the original agreed volume of 14 mmscmd, the Indian volumes may increase to 43-44.25 mmscmd.

SIGNIFICANCE OF THE TAPI PIPELINE:-

1. It will reopen a historic route that reconnects South Asia to Central Asia, in the way it was before the British Empire sealed it off.

2. It will also bring India and its neighbours much needed energy at competitive pricing, and could easily supply a quarter of Pakistan’s gas needs, about 15 per cent of India’s projected needs, as well as Afghanistan’s requirements, by the time it is completed.

3. It will provide energy-hungry India gas to run its power plants. It will further diversify the fuel basket to the benefit of Indian economy and the gas would be used mainly in power, fertiliser and city gas sectors.

INDIA’S ASSOCIATION WITH TAPI PROJECT

India’s association with the TAPI project goes back almost a decade. It began as an Observer country at the 9th Steering Committee Meeting in 2006. In April 2008, India was formally admitted as a member of the Project. Since then, India has been actively participating in all the meetings and has been an active votary of the project.

BENEFITS FOR TURKMENISTAN

With the drastic reduction and imminent cessation of Russian imports of natural gas from Turkmenistan, China has become Turkmenistan’s sole export market. While welcoming economic cooperation with China, Ashgabat has been working assiduously to avoid undue economic dependence on Beijing and therefore has been motivated to make key concessions for the construction of the TAPI pipeline. Supported by the US and the Asian Development Bank, the gas pipeline would help Turkmenistan to find new consumers in Asia via Afghanistan.

The apparent impasse over Turkmenistan’s terms for financing the pipeline’s construction seems to have been resolved owing to the Turkmen government’s new determination to diversify the markets for its natural gas.

CONCERNS

1. The route of the $10 billion, Central Asia-South Asia pipeline traverses Afghanistan’s Kandahar province and the neighboring Quetta region of Pakistan, traditionally the heartland of Taliban militancy. Unless the pipeline is secured from the Taliban that operates on both sides of the Durand Line, and from militant groups operating in Pakistan, it is hard to see how the TAPI dream can go beyond the groundbreaking ceremony.

2. Despite the progress made in the last few weeks, the project still faces certain commercial constraints that have the potential to stall the pipeline construction. Foremost among these revolves around gas pricing concerns, primarily of India and Pakistan. India apparently is not happy about the unit price of gas quoted by Turkmenistan and is hoping to re-negotiate the issue.

4-NATION COMPANY SET UP TO BUILD TAPI

GAIL India Ltd will hold stake in the four-nation company being set up to build the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline. Turkmenistan’s state-owned TurkmenGaz will be the leader of the consortium and will take a minimum 51 per cent stake.

Since among the four state-owned firms, including GAIL of India, neither have the financial muscle nor the experience of a cross-country line, an international company is needed to build and operate it in hostile territories of Afghanistan and Pakistan.

Owing to Turkmenistan law, which precludes the private ownership of land, both U.S. oil majors Chevron and Exxon Mobil withdrew from consideration after Turkmenistan’s refusal to issue an equity stake in the Galkynysh field in exchange for assuming the risk of construction.

Now, with Dubai-based Dragon Oil’s participation, construction of the proposed project can be expected to move ahead with full speed.

WAY AHEAD

The success of a trans-national Central Asia-to-India pipeline would certainly spur the expansion of current efforts to create road and rail transportation connectivity between Central Asia and India. With this connectivity, India would be able to deepen its bilateral economic partnerships with the Central Asian republics and become a major player in the emerging Eurasian regional architecture, creating the possibility of new alliance formations that would help ensure that Central Asia would not become subject to some form of Sino-Russian joint hegemony.