TAPI: A Step Closer to Realization

TRANSCEND MEMBERS, ASIA--PACIFIC, 18 Feb 2013

Debidatta Aurobinda Mahapatra – TRANSCEND Media Service

On 7 February 2013, the Indian Cabinet approved the formation of a Special Purpose Vehicle (SPV) to study the feasibility and design parameters of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline, originally mooted in 2006. The Cabinet also approved the participation of Gas Authority of India Ltd (GAIL) to join the SPV. As per the current plan, all the four participating countries will contribute $5million to SPV. The need for the SPV emerged as despite road shows organized by these countries in various major cities of the world, the project could not evince interest of any major company. As the Cabinet argued, “An active interest in the project by all the partner countries at this stage (with the formation of the SPV) would sustain the credibility of the project,  and generate interest in the international market and could eventually pave the way for selection of an appropriate consortium leader in the future.”

The 1680 kilometer and 56 inch diameter pipeline expected to be built at a cost of about $8 billion will start at Galkynysh field of Turkmenistan, earlier called South Yoiotan Osman field, and will cross through Herat and Kandahar regions of Afghanistan, the later being the stronghold of the Taliban, and then through Quetta and Multan of Pakistan to end at Fazilka, in the Indian province of Punjab. The prospective insecurity of the pipeline though has emerged a concern on part of participants particularly India, it has at the same time provided opportunity for cooperation between the four countries not only in the areas of energy but also in countering extremism and terrorism through a regional format, which can be further expanded to other players in the region. The pipeline, likely to be operational in 2017, will be a major energy supplier to India, Pakistan and Afghanistan with the first two sharing 38 million cubic meter per day and Afghanistan sharing remaining 14 million cubic meter per day. Turkmenistan is considered to be a rich store house of gas, with this particular field of Galkynysh containing about 16 trillion cubic feet of gas.

During the visit of the Deputy Prime Minister and Foreign Minister of Turkmenistan, Rashid Meredov to New Delhi last month, Indian government assured the Turkmen leader of its continuing efforts to realize the goals of the project. Indian President, Pranab Mukherjee has expressed a keen interest in the realization of the project and observed during the visit of Turkmen delegation last month that “Our common endeavour should be to build enduring ties between our two friendly countries, based on a long-term energy partnership. This project is mutually beneficial for economic reasons.” In September 2012, “all parties reaffirmed their commitment and intention to fast track this important regional co-operation project.” The participating countries also signed an Inter-Governmental Agreement along with a Gas Pipeline Framework Agreement (GPFA), with requisite focus on safety and security of the pipeline. They have also mechanisms like the Minister Level Steering Committee and Technical Working Group (TWO) to fast-track the implementation process. Already, Asian Development Bank is providing technical advice regarding the terms and conditions for potential consortium partners.

In contrast to Iran-Pakistan-India pipeline, the TAPI pipeline at least from an international perspective has received least opposition. Major companies like Russia’s Gazaprom, Chevron and ExxonMobil from the US, have expressed interest to invest in the project. Though a clear picture has not emerged yet as to which will be the flagship company in leading the project, the issue of investment may not be mammoth issue in comparison to security of the pipeline. There are apprehensions that the pipeline may be sabotaged by extremist groups, whenever they think pipeline is detrimental to their interest. It is practically impossible to guard this long pipeline stretching over four countries, hence its safety will depend how the governments and various radical groups in these countries, particularly in Afghanistan and Pakistan, view the pipeline.  As the Chairman and Managing Director of GAIL, B. C. Tripathi observed, “There are two issues in such international projects: technical and financial. While GAIL has the technical capability to execute a project of this size, there are some operational concerns – security – which will be the deciding factor on the quantum of risk the company will take.”

The procrastination of the participating countries, coupled with security concerns, and also differences over transit fee, and also unavailability so far of an international partner to invest in the project have delayed the realization of the pipeline. It is difficult at present to predict whether Afghanistan will be peaceful after the US led force departs or it will witness gory incidents of internecine rivalries with support from neighboring powers. The current developments do not portend well for post-2014 period. A recent report suggests that extremist groups like Taliban, and its kin like Lashkar-e-Toiba and United Jehadi Council have started planning to expand their operation to Kashmir in 2014. Such a vicious atmosphere will definitely impact the pipeline prospects. The trust between the participants is a major issue towards the realization of the project. Without trust among the participants, particularly between India and Pakistan, the pipeline may emerge a pipe dream.

But, it is difficult to ignore the positive dimensions of recent developments. The formation of SPV itself is a significant move in this direction. India and Pakistan, the two major participants, are energy hungry countries and both have moderated their rigid positions on contentious issues despite recent skirmishes at border. Pakistan’s democratic establishment has distanced itself from such violent incidents, and that may provide a good sign for democratic disengagement from violence and engagement for peaceful resolution of differences. As President Mukherjee argued during his meeting with Turkmen delegation, the pipeline is “also important for bringing peace and development to our common region.”

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Dr Debidatta Aurobinda Mahapatra is a member of the TRANSCEND Network and an Indian commentator. His areas of interests include India-Russia relations, conflict and peace, and strategic aspects of Eurasian politics.

This article originally appeared on Transcend Media Service (TMS) on 18 Feb 2013.

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