Turkmenistan Finally Puts the “T” in TAPI

Many obstacles remain to the construction of an India-Turkmenistan gas pipeline.

On Wednesday Turkmenistan finally signed agreements with India and Pakistan’s state energy companies to clear the way for the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline.

TAPI was conceptualized in the 1990s and has been beset with a multitude of problems since. Wednesday’s announcement removes a major obstacle for the TAPI project but many more remain.

The pipeline would begin in Turkmenistan’s vast gasfields. Initial TAPI plans called for the source to be the Dauletabad field in southern Turkmenistan. More recent plans indicate that a portion of TAPI would come from the yet to be developed South Yolotan field near the Afghan border.

South Yolotan, which is also called Galkynysh, is estimated to hold up to 21.2 trillion cubic meters of gas, making it potentially the world’s second largest field after the South Pars field shared by Iran and Qatar.

Money has been a major concern for Turkmenistan which has adhered to a strict rule ensuring that its gas is paid for before it is moved beyond Turkmen control.

An intergovernmental framework agreement signed in December 2011 provided for three bilateral negotiations between Turkmenistan and the other pipeline participants on price and transit issues. As the source, Turkmenistan wielded a considerable amount of weight in these discussions. Operationally, the agreement faltered because it necessitated that Afghanistan-Pakistan and Pakistan-India transit fees be in accord before any agreements were made with Turkmenistan.

A breakthrough in negotiations on the ministerial level between Pakistan and India occurred in January of this year which opened discussions of a uniform tariff between both parties and Afghanistan.

While information regarding prices has yet to be released, Indian government statements indicate that the pipeline would provide both India and Pakistan with 38 million cubic meters per day of gas and fourteen million cubic meters for Afghanistan.

TAPI will cost between $10 and $12 billion, according to American estimates but could conceivably double Turkmenistan’s current exports by 2030.

Politics also featured heavily as motivations and roadblocks for the TAPI project partners.

A former Soviet state, Turkmenistan has relied on Russia as an export partner. Gurbanguly Berdimuhamedov, Turkmenistan’s second president, rules a corrupt and authoritarian state propped up by a deep reliance on cotton and gas exports. Diversification of export destinations is vital to the survival of the state.

India and Pakistan are both hungry for Turkmen gas. The project forces both to cooperate — a source of alternating contention and hope.

Pakistan plays a vital role in transporting the gas to India from the Caspian but is simultaneously pursuing a competing pipeline with Iran. The Iran-Pakistan pipeline is beleaguered with its own host of difficulties however and lacks the international support TAPI has accumulated.

Lastly, the war in Afghanistan and the uncertain aftermath remains as the most influential roadblock to the completion of TAPI, which hopeful Indian estimates put sometime in 2018, though construction has yet to begin.

735 kilometers of the 1,735 kilometer TAPI pipeline would run through the Afghan provinces of Herat and Kandahar, presenting a significant security risk in both the construction and operational phases. The Taliban is particularly active in these areas.

The recent NATO conference in Chicago endorsed the 2014 exit strategy as well as the gradual transfer of security responsibility to Afghan forces. It offered little to quell concerns about what happens to Afghanistan’s security situation after the NATO departure. As of yet, there are no answers to the question of how to prevent a Taliban resurgence and an accompanying backslide into chaos, both of which would negatively affect the TAPI project.

Klaus Gerhaeusser, director general of the Asian Development Bank’s Central and West Asian department, said, “Each country stands to gain, making this not only the ‘peace pipeline,’ but a pipeline to prosperity as well.”

Turkmenistan’s signature on agreements with India and Pakistan removes one roadblock but whether the pipeline delivers peace and prosperity balances on the future condition of Afghanistan’s security.