Turkmenistan-Afghanistan-Pakistan-India (TAPI)

The story of the Trans-Afghanistan Pipeline has been reported in countless fragmentary reports, with all the loose threads failing to come together into a coherent piece. Given the complexities of Central Asian politics and the energy business, it wasn't surprising. Pakistan was self-sufficient in gas, and recent discoveries had extended its expected self-sufficiency for at least another l5 years.

Regional leaders from Turkmenistan, Afghanistan, and Pakistan met on 08 July 2002 to formalize plans for a Trans-Afghanistan gas pipeline that would flow from Turkmenistan’s Daulatabad Field to a gas liquifaction facility at the Pakistan port Gwaadar. Continued instability in Afghanistan, combined with very high construction costs and competition from existing liquefied natural gas (LNG) suppliers, put construction of this $4-5 billion pipeline out of reach for a decade or more.

This is a modi?cation of an earlier plan by Unocal to build a pipeline to link into Pakistan’s gas pipeline system, with a separate pipeline to India). The new plan avoided the political difficulties of accessing the large India gas market via Pakistan, but this project was more expensive than the previous initiative due to its greater length and the need to build an LNG terminal.

Many press reports on the Turkmenistan-Afghanistan-Pakistan agreement focused only on pipeline construction, citing costs of about $2 billion. This was the publicly discussed cost of the Unocal-proposed pipeline link to Pakistan‘s gas pipeline network. The pipeline to Gwadar is about 200 miles longer than the earlier proposed link into the existing Pakistani gas pipeline grid, but more importantly, unlike the previous proposal, the new plan required the construction of LNG liquefaction facilities in Gwadar as well as modernization and deepening of the port.

Representatives from Turkmenistan, Afghanistan, Pakistan and India signed the Turkmenistan- Afghanistan-Pakistan-India (TAPI) Natural Gas Pipeline Framework Agreement between the Government on 02 December 2010, as well as a government agreement on measures to implement the gas pipeline project. Turkmen President Gurbanguly Berdymukhamedov, Afghan President Hamid Karzai, Pakistani President Asif Ali Zardari and Indian Oil Minister Murli Deora all attended the signing ceremony. Berdymukhamedov said that after the pipeline with a length of 1,735 kilometers was finished, Turkmenistan would send enough natural gas to the other three countries to meet the needs of their fast developing economy. The whole project was expected to cost 4 billion US dollars.

When Chinese President Xi Jinping visited Central Asia and Southeast Asia in September and October of 2013, he raised the initiative of jointly building the Silk Road Economic Belt and the 21st Century Maritime Silk Road (hereinafter referred to as the Belt and Road). For Afghanistan, the top priority of the Belt and Road Initiative is to speed up infrastructure construction and interconnection, which is the cornerstone for extending regional economic and trade cooperation and making Afghanistan a central place for economic activities again.

In April 2014 China shelved a plan to be part of the Iran-Pakistan (IP) gas pipeline that faced the threat of US sanctions, and offered to join the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline to meet its growing energy needs. Beijing planned to lay a pipeline under the TAPI project from Gwadar to China, which would turn Gwadar Port into an energy corridor. Pakistan and the three other participating countries were finalising tender documents for the TAPI pipeline in consultation with the Asian Development Bank that was playing the role of transaction adviser.

On 13 December 2015 leaders of Turkmenistan, Afghanistan, Pakistan and India at a ceremony in the Turkmen desert broke ground on a major pipeline that could help ease energy deficits in South Asia. Presidents Gurbanguly Berdimuhamedov of Turkmenistan and Ashraf Ghani of Afghanistan were on hand for the ceremony outside the city of Mary in the Karakum Desert, marking the beginning of work on the Turkmenistan-Afghanistan-Pakistan-India (TAPI) link. They were joined by Prime Minister Nawaz Sharif of Pakistan and Indian Vice President Mohammad Hamid Ansari.

"Today we were participants and witnesses of a historic event. Today marks the start of a project of great scale - the TAPI pipeline," said Berdimuhamedov at the ceremony, held in a pavilion imitating a traditional Turkmen nomadic dwelling. "TAPI is designed to become a new effective step towards the formation of the modern architecture of global energy security, a powerful driver of economic and social stability in the Asian region," he added.

Turkmenistan said it expected the gas link with an annual capacity of 33 billion cubic meters to be fully operational by the end of 2018. However there were uncertainties over the project, whose cost is estimated at $10 billion. Aside from the risks associated with a link traversing war-torn Afghanistan, the four-country consortium has yet to confirm the participation of a major foreign commercial partner willing to help finance TAPI. The Galkynysh gas field which will provide the resource base for the TAPI project.

The Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline is expected to create 3,000 to 5,000 job opportunities, 433 million transit fees, and 14 million cubic meters of natural gas for import if it is built. More importantly, the construction of transportation energy passage will lay a solid foundation for industries such as mining, in turn create more sustainable demands for an energy supply network.

Under the TAPI project, Pakistan will get 1.365 billion cubic feet of gas per day (bcfd) from Turkmenistan, India will also receive the same 1.365 bcfd and Afghanistan will get 0.5 bcfd. Turkmenistan will export natural gas through a 1,800km pipeline that will reach India after passing through Afghanistan and Pakistan.

TAPI Pipeline Company Limited (TPCL) was incorporated in Isle of Man on 11th November 2014. The first Board Meeting has been held in Ashgabat, Turkmenistan on 19th November 2014. Pakistan has been selected Chairman of the Board of TPCL. With these agreements in place and some under negotiations, the Asian Development Bank (ADB) as Transaction Advisor has started its work and different technical studies required for the preparation of Information Memorandum/Bidding Documents are underway. Transaction Advisor submitted the part of their scope of work. Initially Turkmen Party was negotiating with different IOC to be potential Consortium Leader. However, in the 22nd TAPI Steering Committee (SC) meeting held on 6th August 2015 in Ashgabat, breakthrough was achieved when Turkmenistan proposed itself as Consortium Leader and SC unanimously endorsed State Concern “Turkmengaz” as the Consortium Leader of TAPI Pipeline Company Limited. Stone laying ceremony of the Project held in Turkmen city of Mary near the Galkynysh natural gas field on 13th December 2015 and was attended by President of Turkmenistan Gurbanguly Berdimuhamedov, Prime Minister of Pakistan Nawaz Sharif, President Afghanistan Ashraf Ghani Ahmadzai and Vice – President of India Mohammad Hamid Ansari. The shareholders of the TAPI Pipeline Company Limited (TPCL) signed an Investment Agreement on 08 April 2016 to pave the way for the delivery of long-term natural gas supplies to Pakistan. The agreement will help Pakistan address energy shortages, a statement from the Asian Development Bank (ADB) said in Islamabad. The Investment Agreement, signed in Ashgabat, Turkmenistan, provides an initial budget of over 200 million U.S. dollars to fund the next phase of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline. This includes funding detailed engineering and route surveys, environmental and social safeguard studies, and procurement and financing activities, to enable a final investment decision, after which construction can begin. Construction is estimated to take up to 3 years. "TAPI will help bring in 13.8 billion cubic meters of gas from Turkmenistan to meet Pakistan's growing energy demand," said Jam Kamal Khan, Minister of State in Pakistan's Ministry of Petroleum and Natural Resources.

Pursuant to Turkmenistan agreeing to become the Consortium Leader for the TAPI Project thereby contributing upto 85% of equity, it was decided that rest of TAPI members namely Afghanistan, Pakistan and India would take 5% each equity share in the Project Company. The overall project cost was estimated at US $ 10 billion including financing cost. Pakistan share @ 5% is estimated at US $ 200 million, which covers both pre and post FID stage. Turkmengas aimed to achieve Financial Close by December 2016.

The long-awaited 1,814-kilometers (1,130-mile) pipeline project, known by its acronym TAPI, which stretches from Turkmenistan and feed gas to Afghanistan, Pakistan and India, was officially inaugurated 23 February 2018 by Afghanistan President Ashraf Ghani in the country’s western Herat province. The work on the Afghan part of the multibillion-dollar project had officially begun, and the project will take several years to complete.

As leaders and representatives of countries involved in the Turkmenistan, Afghanistan, Pakistan and India (TAPI) gas pipeline celebrated the project’s inauguration, Afghan Taliban, in a rare announcement, vowed to support and protect the pipeline in areas under its control. In a statement emailed to media outlets, Qari Mohammad Yusuf Ahmadi, a purported Taliban spokesperson, claimed credit for the project, implying that it was initially planned during the Taliban regime, and said the group will ensure its security in areas under its control. “The Islamic Emirate views this project as an important element of the country’s economic infrastructure and believes its proper implementation will benefit the Afghan people. We announce our cooperation in providing security for the project in areas under our control,” the Taliban statement said.