TAPI pipeline to quench New Delhi’s energy thirst

Peace pipe: The Iran-Pakistan-India project is seen as the harbinger of peace in the region

Energy-hungry India can now hope for better days ahead as there are clear indications that by 2020 the much-awaited Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project will become operational. It is almost certain that the $10 billion project idea will get translated into a reality in accordance with its schedule as the process of the front-end engineering and design route survey has been initiated in Pakistan to take the pipeline to its border with India. Turkmenistan already started construction work with regard to the TAPI project in December 2015 to cover a distance of 1,814 km falling in its territory. Only the Afghanistan stretch of the project remains to be taken up, which should not be a problem with the Asian Development Bank (ADB) having already signed an agreement to finance it and Turkmenistan playing the lead role owing to its desire to quickly end its dependence on Russia and China for its fossil fuel sales.

Of course, the Afghanistan stretch is a tough challenge, but it is “doable”, as the Central and West Asia Director-General of the ADB and transaction adviser to the project, Mr Sean O’Sullivan, stated some time ago. As he sees it, “We are going through some of the toughest territories in Afghanistan. The challenge is there. There is no doubt about it, but I am sure it’s doable.” The pipeline passes through Taliban strongholds, but people of the war-wracked country have given enough indications that the project is a welcome idea for them as it has been designed in a manner so that it helps Afghans find considerable employment opportunities. It will benefit Afghan contractors and ordinary people to a large extent.

Once the project starts bearing fruit, “It will be quite an unprecedented example of regional cooperation, particularly in a region that finds it difficult to cooperate,” according to Mr O’Sullivan.

The pipeline, having the capacity to annually carry 33 billion standard cubic metres of gas, is being built as a joint venture — TAPI Pipeline Company Limited — by a consortium comprising Turkmengaz, Afghan Gas Enterprize, Pakistan’s Inter-State Gas Systems Ltd and GAIL India Ltd. It will continue to supply a least 90 million standard cubic metres of gas daily for 30 years once it becomes functional. Turkmenistan is leading the consortium with a 51 per cent stake, and India and Pakistan will each be supplied 38 million standard cubic metres (mscmd) of gas every day. The rest 14 mscmd will be the share of Afghanistan.

A gas pipeline passing through Pak territory to reach India acquires special significance as it will increase the stake of the two rival neighbours in growth

The project got momentum after Prime Minister Narendra Modi’s visit to Turkmenistan in July 2015, as in August that year India agreed to hold joint ownership of the TAPI pipeline project. What was more encouraging for India was that soon Japan agreed to involve itself in the ambitious project, providing it greater credibility.

As India’s Oil Minister Dharmendra Pradhan said, “We are the buyer. Turkmenistan is the seller. So, if the seller is taking leadership role in the consortium it is a big assurance for (the success of) the project. They (Turkmenistan) are discussing cooperation in the oil and gas sector with Japan. So, Japanese involvement is also expected. All this will only strengthen the project.”

Turkmenistan, which has the world’s fourth-largest gas reserves, will use the TAPI pipeline to supply gas to all the stakeholders from its Galkynysh fields, popularly known as the South Yoiotan Osman fields, having 16 trillion cubic feet of gas reserves. Beginning in this area of Turkmenistan, the pipeline will enter Afghanistan’s Herat and Kandahar provinces before reaching Pakistan’s Multan area via Quetta from where it will be taken to India’s Fazilka (Punjab).

The successful launching of the process of operationalising the TAPI pipeline idea has been possible primarily because of the US efforts to deny its arch enemy Iran the advantage of having the assured sale of gas to India, Pakistan and China through another pipeline called the Iran-Pakistan-India (IPI) project. The IPI idea was thrown into a state of uncertainty following the imposition of economic sanctions on Iran in the wake of the controversy relating to Iran’s nuclear power plants. Now that most of these sanctions have been lifted following an agreement between Iran and US-led Western powers, this project is also likely to be revived.

India has always been interested in the $7 billion IPI project as its completion can lead to the cheapest availability of gas to New Delhi to meet the fast rising energy demand in the country. India has the option of going in for an undersea pipeline project to bring gas from Iran, but it will be costlier than the gas that can be transported through the on-land IPI pipeline. Iran is not happy with Pakistan owing to Islamabad’s dilly-dallying tactics, but the problem is that Pakistan cannot be ignored if the land route idea is preferred. China too has been showing interest in the on-land gas pipeline project.

India meets through imports nearly 80 per cent of its crude oil demands and one-third of its gas requirements. By 2035 India’s energy consumption has been estimated to grow by 4.2 per cent annually, making it faster than all other economies of the world. India has left behind Japan as the world’s third-largest oil consuming country in the world. India acquired in 2008 the status of Asia’s second largest energy consumer after China and is expected to overtake China by 2030 in fossil fuel-based energy consumption and by 2035 it will emerge as the biggest energy consumer on the planet. But it has very little local availability of oil and natural gas. It has to arrange its fossil fuel supplies from wherever possible. That is why India is keen on gas supplies through pipelines from both Turkmenistan and Iran. It has been looking for pipeline-based gas supply from Russia and Myanmar too.

A gas pipeline passing through Pakistani territory to reach India acquires special significance as it will increase the stake of the two rival neighbours in shared economic growth. That is why the IPI project had come to be seen as the harbinger of peace in the region before it got stalled owing to the US pressures. India must take an active interest in the IPI idea too besides the TAPI project because Iranians appear to be more inclined towards selling their gas to India than to any other country in the region. The Iranian gas will be more attractive cost-wise too because of the distance factor. The problem with the TAPI project is that it passes through Afghanistan’s most dangerous areas in virtual control of the Taliban factions. The interests of the Taliban will have to be sensitively taken care of to ensure the security of the TAPI pipeline in view of the new US Administration’s changing Afghanistan policy.