Afghan TAPI Construction Kicks Off, But Pipeline Questions Still Unresolved
Bruce Pannier February 23, 2018
Executives and regional leaders gathered for a ground-breaking ceremony for Afghanistan's section of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline on February 23 in the western Afghan city of Herat.
Herat, and uncertainty as the ceremony there approached, provide another reminder of the doubts and questions that have surrounded the TAPI pipeline for years now.
On February 20, Jailani Farhad, the spokesman for the Herat mayor, was quoted as saying the project would be inaugurated on February 25. China's Xinhua news agency seemed hesitant to provide an exact date at all, also reporting on February 20 that the "ceremony is expected to be held within coming days."
Turkmen President Gurbanguly Berdymukhammedov was visiting Mary on February 21. His country, of course, is the supplier of gas for TAPI; and given Turkmenistan's current dire economic situation (more on that below), it is in Berdymukhammedov's interest to see Afghanistan start construction of TAPI. Berdymukhammedov told officials that on February 23 "many important events" would take place, first of all the launch of construction on TAPI in Afghanistan but also the start of work to build a new high-voltage transmission power line and extend a railway from Turkmenistan to Afghanistan.
Berdymukhammedov indicated he would be at the ceremony in Herat but it was not mentioned in a report on the official Turkmen government website.
So one question was whether the Turkmen president would make the trip to Herat (he did); another was whether he would dress in his commando fatigues, as he did in videos last year, perhaps to frighten away militants.
Because security along the 744-kilometer section of the TAPI pipeline has been a huge question in recent years as fighting spread and intensified in previously relatively stable areas of northern Afghanistan. In fact, RFE/RL's Radio Free Afghanistan, known locally as Azadi, reported on February 22 that Herat officials said insurgents who were trained by Iran to disrupt the February 23 ceremony had switched sides and joined the government.
For what's it's worth, a spokesman for the Taliban and a Taliban splinter group led by Rasul Akhund that operates in northwestern Afghanistan have both pledged to protect construction of TAPI through Afghan territory, since it is a "national project."
Given the government in Kabul's bold claims that TAPI would help bring prosperity and stability to Afghanistan, it is difficult to imagine any militant group in Afghanistan resisting the temptation to try to sabotage the project and keep the government from boosting its popularity and support in areas along the proposed TAPI route.
And the Taliban and the Taliban splinter group are not the only armed groups active in northern and western Afghanistan. There are other militant forces and warlords there as well.
What Afghanistan Gets
TAPI aims to carry some 33 billion cubic meters (bcm) of natural gas a year, most of which is intended for markets in Pakistan and India.
Afghanistan should receive some 5 bcm of that gas, but equally if not more importantly, Afghanistan will receive transit fees from TAPI.
But how much?
The Afghan Voice Agency reported on February 19 that the amount would be "nearly $400 million" annually. Afghanistan's ToloNews reported on February 20 that "Afghanistan is expected to earn $500 million USD in transit duties annually from the project. Turkmen Foreign Minister Rashid Meredov promised in November that Afghanistan would receive some $1 billion annually in transit fees from TAPI.
Of course, Turkmenistan is experiencing the worst economic crisis of its 26-year history as an independent country, in large part due to the inability to sell Turkmenistan's major and nearly only export: gas. So Turkmen officials could be expected to say anything that would portray TAPI in a positive light, especially since financing for the project is still uncertain.
Who Will Pay For Construction?
State company Turkmengaz is the operator of TAPI. That means Turkmengaz must find some $8.5 billion of the estimated $10 billion it will cost to build TAPI. The company has no experience managing a major project outside Turkmenistan and so far has found it difficult to attract investors. The Islamic Development Bank already promised a loan of some $700 million, but that's where it ends.
Other countries and companies have reportedly expressed some interest in joining TAPI -- the China National Petroleum Corporation, Russia, Uzbekistan, Saudi Arabia -- but no contracts have been signed.
Turkmenistan alone cannot come up with the remaining almost $8 billion that Turkmengaz still needs to cover its share of the costs. And it will not have escaped the attention of potential foreign investors that Afghanistan, Pakistan, and India, the countries that will also benefit from TAPI, have never gone beyond the 5 percent of costs ($500 million) that each is committed to spending -- showing, perhaps, that there are doubts about the viability of TAPI in Kabul, Islamabad, and New Delhi.
Another question that we're still looking for an answer to is whether Turkmenistan has completed its section of TAPI. There was a big launch ceremony in Turkmenistan in December 2015 for construction of the 214-kilometer portion on Turkmen territory. Turkmen officials have maintained since then that construction was progressing. But strangely, state media in Turkmenistan, which is obsessed with showing pictures and footage of the country's major projects, has not shown much proof of TAPI's construction. Once there were some photographs in 2016 of sections of pipe-laying in a desert that were alleged to be somewhere in eastern Turkmenistan.
But we're still waiting for clues from the February 23 ceremony in Herat to clear up that and other questions.
The views expressed in this blog post do not necessarily reflect the views of RFE/RL
Copyright (c) 2018. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.
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