Turkmenistan is blessed with huge natural reservoirs and resources in shape of oil and gas and other precious metals. Moreover, its export-oriented energy policy makes it one of the ideal countries in the Central Asian countries and the world to do businesses. Its outstanding commercial diplomacy holds the secret of its high ratios of exports.
TAPI and Strategic Importance of Energy
Energy is power. Energy is life. Energy is development. Energy simulates economic and business activities. Furthermore, a cheaper and green energy source i.e. gas creates more comparative advantage than other energy sources (oil, diesel, electricity etc.). Turkmenistan-Afghanistan-Pakistan-India (TAPI) the dream gas pipeline has a strategic importance, utility, productivity and durability to achieve greater regional peace and prosperity in the days to come. It would provide crucial inputs to achieve a stable and sustainable growth patterns for all the participatory countries. It is indeed a gift from the government of Turkmenistan.
TAPI: A Game & Fate Changer Project
It is indeed a game and fate changer mega project for the entire region. TAPI would boost the regional economies and open up unlimited avenues of prosperity and would be a win-win situation for all four countries.
Turkmenistan’s National Energy Policy
Right from independence, Turkmenistan has been open and helpful to provide alternative source of energy mainly gas to China, Russia, Iran and many other countries. TAPI is the brain child of Turkmenistan which wanted to further diversify its export-orientation in terms of oil and gas. This took more than twenty years to finalize but thanks God at last it has now been finalized and formalized.
TAPI’s Basic Information & Technicalities
| Basics | Details |
| Official Name | Turkmenistan-Afghanistan-Pakistan-India (TAPI) |
| Participatory Countries | Turkmenistan-Afghanistan-Pakistan-India |
| Distance | 1735 KM |
| Estimated Cost | $10 billion |
| Annual Capacity | 33 billion cubic meter (BCM) of gas |
| Source of Supply | Turkmenistan Gylkynish, the 2nd largest in the world |
| Total Capacity | 16 trillion cubic feet |
| Source | Different English Journals & Dailies of Turkmenistan and Pakistan |
Turkmen Ministry (April, 2016)
Moreover, according to Turkmen Ministry (April, 2016) Turkmenistan will make an investment of around $25 billion of which $15 billion will be poured into developing the gas field whereas $10 billion will be spent on laying a 17351 km long pipeline.
Latest Development about TAPI
According to Turkmen Ministry (April, 2016) Turkmenistan has now constructed linear part of the Turkmen section of the TAPI. Turkmennebitgazgurlyshyk” has already prepared more than 6,312 meters of pipes with a diameter of 1,420 mm for welding-up of pipe sections. After laying the linear part of the gas pipeline, automation and remote control system will be introduced in the Turkmen section. This system will make it possible to carry out the management of the entire gas pipeline network from a single control point: to increase and reduce gas flows depending on export requirements.
In addition, on the route of the pipeline from the Galkynysh super-giant field till the border with Afghanistan, the designers have completed a topographic survey and a complex of engineering and survey work. This will make it possible to select the best route for the gas pipeline and to determine the characteristics of the pipe used for gas transportation.
Also, work continues on the analysis and the selection of equipment that must be installed on the linear part of the pipeline and its ground supporting sectors.
Turkmenistan’s Energy Reserves
Turkmenistan with the world’s fourth-largest gas reserves, started building its section of the TAPI gas pipeline project designed to further diversify its energy exports. Turkmen state energy firm Turkmengas is the main shareholder of TAPI Pipeline Company Limited, the joint venture set up to carry out the project. Other investors are Afghan Gas Enterprise, Pakistan’s Inter State Gas Systems Ltd and GAIL (India) Ltd.
Finalization of Modalities
All the participatory countries have agreed to proceed further and complete its mega project in 2019-2020. It has got tremendous momentum during last two years. Rigorous commercial diplomacy among all the countries has now made it reality. Its ground breaking ceremony was held last year in Turkmenistan. Turkmenistan, Afghanistan, Pakistan and India (TAPI) project agreed on to invest $200 million in studies and engineering for the pipeline.
Significant Achievement
It is a significant achievement as the project was lingering since 1990 and within the past two and half years the partner countries worked hard to initiate the project. All the member countries were eager to initiate the project as they faced serious energy deficits. Finally Turkmenistan government obliged all the countries and took the decision to become lead financer and now construction of TAPI had been started.
TAPI’s Ground Breaking Ceremony
On 13th December 2015, the Ground Breaking Ceremony (GBC) of TPAI was held at Mary, Turkmenistan. Earlier in November 2014, the Pipeline Consortium, TAPI Pipeline Company Limited (TPCL) was incorporated in the Isle of Man, a British Crown dependency. The Share Holders Agreement of TPCL was also signed on 13th December 2015. The shareholding percentage in the TPCL would be Turkmenistan 85 percent, Pakistan 5 percent, India 5 percent and Afghanistan 5 percent.
TAPI and Leadership’s Strategic Vision
| Name of the Leaders | Strategic Vision |
| H.E. Gurbanguly Berdymukhamedov, President of Turkmenistan | 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. |
| Nawaz Sharif, Prime Minister of Pakistan | The TAPI gas pipeline project will help promote peace and trade amongst the regional countries. It will help bring prosperity and peace. |
| Mohammad Hamid Ansari, Vice President of India | TAPI is a more than a project. It the first step to the unification of the region. |
| Ashraf Ghani, President of Afghanistan | TAPI demonstrates the countries’ political will. |
Strategic Importance
(a) Asian Development Bank (ADB) Latest Assessment
Most recently, even Asian Development Bank (ADB) has also termed TAPI a “doable project” which has tremendous socio-economic significance for the participatory countries as well as the region. TAPI exemplifies ADB’s key role in promoting regional cooperation and integration over the past 20 years. It will unlock economic opportunities, transform infrastructure, and diversify the energy market for Turkmenistan, and enhance energy security for the region.
ADB says that the $200 million investment includes funding for 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.
(b) Beginning of a New Era
TAPI gas pipeline project would be the beginning of a new era of cooperation and interconnectedness at the regional level. The project will connect Central and South Asia with each other. The launching of TAPI gas pipeline project is a revolution in energy sector.
(c) Alternative Energy Supply Source
TAPI will provide an alternative supply source of gas with dependable reserves leading to enhanced energy security. It will further diversify the fuel basket to the benefit of Pakistan and Indian economies.
(d) China’s Willingness
Most recently, China also expressed interest in becoming part of the TAPI gas pipeline project. The extension of the pipeline to China through Gwadar would give a boost to economic activities in Balochistan. The pipeline would connect a wider region if Bangladesh formally joins it.
(e) Greater Regional Pace & Prosperity
TAPI would bring regional stability that ultimately would lead to peace and prosperity. It has the potential to create a joint economic ring in the region and, in the long-term, the economic profits will guarantee regional security.
(f) Formation of New Markets & Opportunities
It provides golden economic opportunities to Pakistan, India and Afghanistan. Due to more economic opportunities, new markets will be opened for even Turkmenistan as it can extend its exports to the East where there is a remarkable demand for energy.
(g) Total Capacity
It is estimated that TAPI gas pipeline project would bring 3.2 billion cubic feet gas per day (BCFD) to all the participatory countries and it would be completed by December 2019.
(h) Solution to Energy Deficit
TAPI gas pipeline project will be helpful to overcome the energy shortage in Pakistan, India and Afghanistan. Under the agreement that was signed recently in Turkey, Turkmenistan will invest 85 percent and rest of the three countries 5 percent of the total cost in the project.
Official Document
According to an official document “the agreement between the partners is for a period of 25 years and the area from where gas will be supplied has proven reservoirs of 21 Trillion Cubic Meters (TCM) of gas which can last for 100 years. The work on Pakistan’s segment of the pipeline would likely to start by early 2017 and the gas price at Afghanistan border will be around 8 percent of the Brent oil and if added the tolling fee of the pipeline at current oil prices it will cost in the range of $5.7-6.2 per MMBTU. It total cost may reach to $10 billion.
Turkmenistan’s government financial kindness
Turkmenistan government has been kind enough to invest an estimated amount of $25 billion in developing gas fields and prepare 1680 kilometer gas pipeline. Each of the other partner country will have five percent shares in the construction of the pipeline.
TAPI and Pakistan
Pakistan has been suffering from a dire energy crisis because the country did not increase its energy capacity. Pakistan’s severe energy deficit has multiplier effects which is not only affecting different sectors of the economy, but also diverse segments of society.
According to Pakistan’s government by 2050 Pakistan’s electricity requirements will grow three-fold. If sufficient resources are not allocated and utilised effectively and efficiently, the energy crisis will further aggravate. It is estimated that TAPI volume would overcome almost 70 percent of the current gas shortfall and save almost $1 billion per year by replacing liquefied fuels for power generation.
In Pakistan during the winter season, the common people and industrialists used to face acute shortage of gas in the country. Life and machine became standstill. Keeping in view all these emerging trends/factors, the government planned to import of gas supply from different sources and the TAPI was one of them. Gas supply in Pakistan is currently 71m cubic meters per day, which is estimated to increase by 50 per cent in the next five years. At present, Pakistan produces 4 bcfd of gas against demand for 6 bcfd.
Gas production in Pakistan is expected to increase substantially. The government is trying to increase its oil and gas production. It is assumed that in the near future Pakistan will face a sever shortfall in the future despite meager gas discoveries, which would be insufficient to meet the rising demand.
TAPI Pipeline Company Limited (TPCL) Responsibly
TAPI Pipeline Company Limited (TPCL) is responsible for laying a 56-inch diameter 1680 kilometer pipeline from supply source at Gylkynish and adjacent gas fields, sneaking through Heart-Kandahar-Chamman-Zhob-DG Khan-Multan and Fazilika-Pakistan- India border.
TAPI’s Distribution Scheme
According to agreement out of total gas volume, Afghanistan would get 500 mmcfd and Pakistan and India each will get 1,325 mmcfd. However, either Pakistan or India could purchase more gas if Afghanistan wanted to provide the natural gas out of its total share. It is a vital project for Pakistan as it would generate employment for thousands of Pakistani youth.
| Different Sectors/Sub-Sectors | Benefits |
| Industrial | It will bring Pakistan much needed energy at competitive pricing, and could easily supply about 35 percent of Pakistan’s projected needs by the time it is completed in the 2019-2020. |
| Social | It will further diversify Pakistan’s pursuits to import more and more energy resources from different countries. It will be value-addition in the country. |
| Fertilizers | It will supply interpreted energies to fertilizers in the country and ultimately increase its agriculture productivity. |
| Exports | It will definitely enhance its exports because of easy and smooth supplies of energy through TAPI. |
| Revenues | The potential extension of the pipeline to the Gwadar Port in Pakistan will also enable Pakistan to export gas to several countries, thereby increasing its share of revenue. Moreover, transit fees would also be an extra source of revenues. |
| HRM | It will generate substantial new jobs in different associated sectors of the national economy in the near future. |
| Banking & Finance | It is hoped that domestic banks and financial institutes may form a consortium to invest this mega development project. |
TAPI: Cheapest Price
TAPI gas would be cheapest in terms of its price. Pakistan will get $250 million from India as transit fee and Afghanistan will also get the same amount from Pakistan. The agreement is between the states and the change of any government in any partner country will have no impact on the project.
The government of Pakistan must remove all obstacles in the way of the project as it has a vital importance for the national economy in general and export-oriented industry in particular. It is predicted that Pakistan’s industrial growth would certainly go up when sufficient energy would be available to keep the wheels of industry moving through TAPI.
Moreover, early execution of TAPI gas pipeline project would enhance productivity of export-based industry that would give a boost to the country’s exports. Large Scale Manufacturing (LMS) sector would be able to manage their export orders easily and earn more and more foreign exchange for the country. TAPI would be Pakistan’s largest development project.
An early completion of the TAPI project would also give a very good message to foreign investors. It would not only reduce tensions in South Asia but would also create employment and economic opportunities in the country. It would not only help Pakistan overcome ongoing energy crisis but would also promote political and economic interaction between Pakistan and Afghanistan who were the main stakeholders of the project.
The strategic significance of the project is huge. Once completed, TAPI can become a game changer in regional geopolitics and regional economic integration. Due to significant transit revenues, if the project is completed successfully, it could bring together Pakistan’s Central Asia’ policy and China-Pakistan Economic Corridor (CPEC) of the Chinese ‘One Belt One Road’ project.
Pakistan’s Domestic Consumption Patterns/Supply Channels
According to Pakistan‘s government 25 percent of gas would be fed to Sui Southern Gas Company (SSGC) and 75 percent to Sui Northern Gas Pipelines Company Limited (SNGPL) to inject it in their systems as per the decision of the ECC. TAPI project is the best manifestation of the government’s efforts to bridge supply and demand gap which had increased to around 2 bcfd.
Benefits of Pakistan
The Turkmenistan-Afghanistan-Pakistan (TAP) gas pipeline is based on mutual friendship, respect and need. It also comprises of economic prosperity, regional cooperation and above all smooth and easy availability of energy resources i.e. gas. Pakistan expects to run out of its own reserves after a few years, the pipeline will help sustain growth. It helps to provide a market to Turkmenistan for its substantial gas reserves.
Moreover, TAPI will provide cheap gas for Pakistan, India, transit fee for Afghanistan, and energy market to Turkmenistan, which will add to the economic prosperity of all the countries. It is estimated that the TAPI project will reduce poverty by expanding the use of natural gas resources and enhancing sub regional economic cooperation among Turkmenistan, Afghanistan, Pakistan and India. It will generate hundreds of thousands new jobs.
It would be one of main instrument for enhancing regional stability and improving living standards in South and Central Asia. It will be a joint-giant effort in linking the energy-deficit economies of South Asia to the hydrocarbon-rich Central Asian countries. It will provide cheaper and cleaner energy to consumers which would bring economic prosperity and also reduce high ratios of inflation.
TAPI will generate incomes/revenues that can be used for developing the social sectors, especially schooling, medication, clean water and housing and it will bring regional stability, peace, harmony and brotherhood. It has multiplier effects.
Concluding Remarks
Turkmenistan-Afghanistan-Pakistan-India (TAPI) is a mega regional development project that will enhance regional peace and prosperity. It would foster socio-economic prosperity and will support dialogue and diplomacy instead of destruction in conflict resolutions.
It upholds shared-destiny of greater economic prosperity, sustained development and resolve against all odds to achieve the desired goals of regional peace and harmony. It is hoped that on completion it will boost the countries energy security, bring economic benefits, create new jobs and provide and upgrade associated infrastructure.
TAPI is seen as an ideal opportunity to pave the way for stability in Afghanistan and could contribute to the rehabilitation of the war-torn country. It would also reduce hostile gesturing between Pakistan and India. Its implementation will also strengthen Turkmenistan’s independence, and as a result its gas supplies to world markets will significantly increase.
It is hoped that the successful implementation of the TAPI pipeline project would represent an enormous breakthrough for Turkmenistan’s capabilities as an international energy player even in South East Asian Region. It would further diversify its energy exports in the days to come.
The government of Pakistan wants an early completion of TAPI that has the capacity to meet 70 percent of country’s gas shortfall. TAPI is now seen as a pipeline of friendship and greater connectivity between the Central Asian and South Asia and even between two South Asian rivals.
It is hoped that the completion of the TAPI will ensure delivery of long-term natural gas supplies to run the wheels of industries both in Pakistan and India. The pipeline will set a classic example of the regional cooperation between the two countries which are the rivals in defense but partners in economy.
TAPI is a game changer for all countries and therefore, TAPI has to be tapped and monitored continuously. Early execution of the project would help energy-starved Pakistan to overcome ongoing crisis, which is hitting the industrial sector hard. Establishment of an inter-government joint security task force (JSTF) to serve as the nucleus of the safety of the pipeline would be useful to overcome all the projected “red-lines” in the project.
