Wielding soft power: US offers to finance TAPI gas pipeline

Published: December 19, 2011
Asian Development Bank becomes a transaction adviser for the initiative. DESIGN: FAIZAN DAWOOD

Asian Development Bank becomes a transaction adviser for the initiative. DESIGN: FAIZAN DAWOOD


The US has made a generous offer to finance the multibillion-dollar Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline, an implicit gesture to lure Pakistan away from the Iran-Pakistan (IP) gas pipeline deal.

Addressing students of Lahore University of Management Sciences (LUMS) on November 25, US ambassador to Pakistan Cameron Munter had termed Pakistan-Iran gas pipeline deal unfeasible. A viable alternative, in his view, was the Turkmenistan-Afghanistan- Pakistan-India (TAPI) pipeline project via Afghanistan.

In the $7.5 billion TAPI gas pipeline project, Pakistan’s share will be 1.35 billion cubic feet per day (bcfd) out of a total of 3.2 bcfd gas exports from Turkmenistan.

Asian Development Bank (ADB) has also become a transaction adviser for TAPI gas pipeline project, raising funds for it by forming a consortium of leading lenders.

Although Pakistan and Turkmenistan have signed the Gas Sales Purchase Agreement (GSPA) on TAPI project, the two countries are yet to take a final decision on it.

Sources inform The Express Tribune that the Export-Import Bank (EIB) of the United States as well as the Overseas Private Investment Corporation (OPIC), an “independent” US agency, have offered Pakistan financing for TAPI. “As Pakistan has welcomed the offer, Pakistani and US authorities were scheduled to discuss it on the sidelines of the Bonn conference,” sources asserted, adding that the discussions could not take place due to the subsequent boycott of the moot by Islamabad.

Petroleum Secretary Ijaz Chaudhry, however, asserted that he had no knowledge of any financing offer by the US for the TAPI gas pipeline project.

“After finalising gas price, the approval of Economic Coordination Committee (ECC) would be sought to sign the final GSPA with Turkmenistan,” he added.

Pakistan is yet to finalise transit fees with neighbouring Afghanistan and India.

According to sources, the Minister for Petroleum and Natural Resources is expected to leave for New Delhi next month to hold talks with his Indian counterpart after transit fee is finalised with Afghanistan.

Three options are under consideration for transit fee on gas imports.

The first deals with fixing it on transmission of gas from Turkmenistan. The second one includes linking it with the length of gas pipeline. The third option may involve taking into account the volume of gas to be consumed by each country.

Published in The Express Tribune, December 19th, 2011.

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Reader Comments (8)

  • Munir Ahmad Saeed
    Dec 19, 2011 - 1:46PM

    TAPI is expensive and time taking option. It will run through Afghanistan, where peace in next decade is distant dream. Whereas pipeline from Iran will be ready in 2013-14. TAPI is at discussion stage. Infact we need both but having Iranian gas and Iran on our side is more important than just an offer from a distant and unreliable superpower. How many shocks Pakistani nation needs to realize that total dependence on US is detrimental for our independence if there is still left. Wake up Pakistan, give up client-Master relationship with the US and build good relations with your neighbors on all sides of borders.

    Ahmad Saeed Canberra Australian


  • Loyal to Pakistan
    Dec 19, 2011 - 4:22PM

    @Munir Ahmad Saeed:
    I 100% agree. The US itself cannot fulfill its own energy needs and it want’s to help Pakistan. Pak-Iran gas pipeline first and then after that if the US still wants to finance TAPI, then no problem. But the US is certainly not sincere in it’s offer. The real goal is to stop the Pak-Iran gas pipeline deal and stop Pakistan from fulfilling it’s energy needs.


  • S.R.H. Hashmi
    Dec 19, 2011 - 5:45PM

    I agree entirely with what Munir Ahmad Saeed has said. Iran-Pakistan pipeline project is a far more sensible option than the TAPI one, which will cover a much greater distance, even pass through war-torn Afghanistan.

    As for Cameron Munter’s expert advice that TAPI is a more feasible project, all we have to do is to keep in mind that he is here to safeguard American, and not our interests. You have got to give him credit for taking on an impossible task, that of trying to assure us that we are terribly mistaken in not recognizing the US as best of our friends. By the way, Americans promised to help us in many fields and actually various sub-committees were formed for the purpose, including one for electricity, but we are yet to see any concrete results. What is there for sure is that Americans have lately put stringent conditions on whatever little aid they give us, making its receipt nearly impossible unless we capitulate fully, much against our own interests. That shows very clearly how helpful they have been, and will be, to us. I think it would be far more beneficial if Cameron Munter worked on the officials back home and convinced them to cease, or at least reduce, the level of their hostility towards us, in words and deeds.

    Strictly speaking, with Osama bin Laden already dead, military targets having been achieved and with al-Qaeda and Taliban neutralized and in disarray, all according to their claims, there is no reason for the US to hang around in our region. However, they want to have permanent presence in the region to launch overt and covert attacks on Iran and Pakistan, to keep an eye on China and to prepare India as the sacrificial goat in their war with China, much like they used us against the USSR, for which we are still paying the price. TAPI will give them just the right excuse to be here, ostensibly to protect it from ‘terrorists,’ and to help out their real ally in the region, India until the time Indians discover that the association is not entirely to their advantage, much like we did.

    I hope Pakistanis do not fall in to the trap set for them. At best, Pakistanis, without sharing the cost of actual laying down and maintenance of the pipeline, should just agree to pay for the gas we consume, while charging rental for our land used for laying the pipeline and, of course, without American presence all along the pipeline route, ostensibly to protect it.


  • Muhammad
    Dec 19, 2011 - 7:07PM

    in the name of whatever you believe .. give us a break keep your money to yourself and hurry up with Iran Pakistan line


  • Mohsin
    Dec 19, 2011 - 7:16PM

    Please no more US involvement in matters of our national security. Just stay at some distance from the US.


  • Cautious
    Dec 19, 2011 - 7:41PM

    The unfortunate reality is that even if both pipelines were already in place — you don’t have the money to buy the gas. It’s one of those obvious things that you seem to ignore — go figure. There is no shortage of natural gas in this World — pipelines just modify the cost structure.


  • Ex
    Dec 19, 2011 - 9:06PM

    Lol finance ? More like charge high I treat rates
    The us should build it and pay for everything . This an American project do they should pay for it


  • Ali
    Dec 29, 2011 - 2:53AM

    A pipeline from Iran, right next door, is infeasible but one through Afghanistan, which has been in a state of civil war since Alexander the great is the preferable option.

    Usual lies America tells us.
    They will pay for the first half of it, then Congress will vote the funding down and we’ll have a pipeline half way to no where.


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