TAPI peace vision: Turkmenistan begins building $10b gas pipeline

Published: November 8, 2015
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PM to attend December 13 groundbreaking in Ashgabat. PHOTO: FILE

PM to attend December 13 groundbreaking in Ashgabat. PHOTO: FILE

ISLAMABAD / ASHGABAT: 

Energy-rich Turkmenistan’s leader has ordered the start of construction on a multibillion-dollar pipeline carrying gas from the former Soviet state to India, Pakistan and Afghanistan, the government said on Saturday.

President Gurbanguly Berdymukhamedov ordered state companies Turkmengaz and Turkmengazneftstroi to begin building the republic’s section of the pipeline, state media said. Backed by the United States, the Turkmenistan-Afghanistan-Pakistan-India (Tapi) pipeline project has been hailed as the ‘Peace Pipeline Project’.

Overall, the pipeline will stretch 1,800 kilometres and is likely to cost more than $10 billion. In addition to that, Turkmenistan will invest $15 billion to develop a gas field from where it will transport gas to the three countries.

The Turkmenistan official newspaper also said the government expects the gas link, with an annual capacity of 33 billion cubic metres, to be fully operational by the end of 2018. However, officials fear the project might not be completed before 2020 because the pipeline will pass through Afghanistan, where a deadly Taliban insurgency has been ongoing since 2001.

The project could help ease growing energy deficits in Asian giants India and Pakistan. For Turkmenistan, which has been hit by low energy prices and is dependent on China for the vast majority of its gas sales, Tapi is a key opportunity to diversify its exports.

But uncertainty hangs over the costly project. Aside from the risks associated with a link traversing war-torn Afghanistan, the four-country consortium has yet to confirm the participation of a foreign commercial partner willing to help finance it.

Pakistan’s Prime Minister Nawaz Sharif is likely to travel to Ashgabat next month to attend the groundbreaking of the pipeline project.

Top officials from the four countries met in Istanbul, Turkey, on Saturday to discuss how to proceed with the project after its groundbreaking on December 13.

Under the project, Pakistan and India will receive 1.3 billion cubic feet of gas per day, while Afghanistan’s share will be 500 million cubic feet per day.

Initially, US-based firms Chevron and Exxonmobil had tried to become the consortium leader while a French energy giant was also in the race.

However in the end, a Turkmen energy firm decided to become the consortium leader with an initial investment commitment of $4 billion.

Other stakeholders, including Pakistan, also have investment offers. Top gas utilities SNGPL and SSGCL are expected to get a share in pipeline-laying project in Pakistan.

Published in The Express Tribune, November 8th, 2015.

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