TAPI project: Re­viv­ing the Eurasian Cor­ri­dor

Enterprise - - Trade Watch -

The modern day Eurasian Cor­ri­dor cov­ers the Cen­tral Asia and the former CIS states, ul­ti­mately con­nect­ing East­ern Europe and South Asia. The Eurasian Cor­ri­dor is once again mak­ing news as the long-planned gas pipe­line named TAPI, ( Turk­menistan, Afghanistan, Pak­istan and In­dia) is fi­nally un­der con­struc­tion. The TAPI project is spon­sored by the Asian De­vel­op­ment Bank and sup­ported by a mul­ti­lat­eral struc­ture. The fea­si­bil­ity re­port of the project was com­pleted by ADB in 2008, ac­cord­ing to which the es­ti­mated cap­i­tal cost was to be $ 7.6 bil­lion.

The pipe­line is planned to be 1,043 miles long, stretch­ing from the Daulatabad gas field in Turk­menistan, to its ter­mi­nus in In­dia. The pipe­line has a ca­pac­ity to carry 1.9 bil­lion cu­bic feet of gas per year. Ac­cord­ing to the Eco­nomic Times of In­dia, Turk­menistan will sell the gas for $ 272 per thou­sand cu­bic me­ters, a markup of ap­prox­i­mately one third over what the Turk­men are sell­ing to China. With the ad­di­tion of time charges and tran­sit fees to Afghanistan and Pak­istan, the ac­tual price to In­dia will be ap­prox­i­mately $ 362 per tril­lion cu­bic me­ters ( tcm). At this price, Afghanistan would be earn­ing $ 1.4 bil­lion in tran­sit fees.

As Turk­menistan is the source of gas in the project, there are dis­agree­ments on how much gas the coun­try ac­tu­ally holds. Ac­cord­ing to the BP Sta­tis­ti­cal Re­view 2009, Turk­menistan has the world’s fourth largest re­serves of nat­u­ral gas, 7.94 tcm, ex­ceeded only by Rus­sia, Iran and Qatar. The huge South Yolotan-Os­man field in western Turk­menistan was au­dited by the UK au­dit­ing firm Gaffney, Cline & As­so­ci­ates. The au­dit es­ti­mated the re­serves of this field alone to be be­tween 4 and 14 tcm of gas, mak­ing it the world’s fourth largest field.

Turk­menistan of­fers a hub for pipe­lines to ex­port nat­u­ral gas in all di­rec­tions, com­mit­ted to mul­ti­ple ex­port routes: north to Rus­sia, east to China, south to Pak­istan and In­dia via Afghanistan, and pos­si­bly west to Europe via the Caspian Sea.

Ex­tend­ing from the Daulatabad gas field in Turk­menistan, the pipe­line leads the high­way through Herat, Hel­mand and Kan­da­har in Afghanistan, to Quetta and Mul­tan in Pak­istan, and on to Fazilka in In­dia. Thus, Afghanistan has a strate­gic cen­tral sig­nif­i­cance in the TAPI project. Ac­cord­ing to Pres­i­dent Berd­mukhamme­dov of Turk­menistan, it is be­lieved that the pipe­line will act as a sta­bi­liz­ing in­flu­ence on the Afghan re­gion.

The National De­vel­op­ment Strat­egy ( 2009-2013) of Afghanistan con­tains the on­go­ing plan­ning for TAPI pipe­line as the most sig­nif­i­cant de­vel­op­ment strat­egy for the coun­try. Afghanistan’s cen­tral role as a land bridge con­nect­ing en­ergy-rich Cen­tral Asia to en­ergy-de­fi­cient South Asia is the ba­sis of the de­vel­op­ment strat­egy. Also, the TAPI project is be­ing re­lied on by Afghanistan as an ex­port route for the bid­ding for­eign com­pa­nies to ex­plore hy­dro­car­bon in the north of the coun­try.

TAPI is ex­pected to boost the economies of all four coun­tries. The govern­ment of Pak­istan has de­scribed the pipe­line as a vi­tal project for the de­vel­op­ment and progress of the re­gion. In ad­di­tion, the pipe­line is also be­ing con­sid­ered as po­ten­tially good for peace. As Pres­i­dent Berdimuhame­dov said, “ The pipe­line be­tween Turk­menistan, Afghanistan, Pak­istan and In­dia will be a weighty con­tri­bu­tion to the pos­i­tive co­op­er­a­tion on this con­ti­nent.”

If set into ac­tion, such an agree­ment will not just pro­vide an eco­nomic boost to mem­ber na­tions, but will also bet­ter place them to take ad­van­tages of pos­si­ble op­por­tu­ni­ties such as lo­cal currency trade, along with greater so­cial in­te­gra­tion that had once ex­isted cre­at­ing greater ac­cept­abil­ity amongst lo­cal peo­ple. Such co­op­er­a­tion of­ten also cre­ates much greater diplo­matic mus­cle to in­flu­ence events and is­sues which af­fect them.

In spe­cific re­la­tion to the mem­ber coun­tries, for Turk­menistan, TAPI pipe­line would pro­vide rev­enue and di­ver­si­fi­ca­tion of ex­port routes, for Pak­istan and In­dia, it would ad­dress en­ergy deficits. In Afghanistan, it would pro­vide rev­enue for de­vel­op­ment and gas for in­dus­trial enterprises. The po­ten­tial for ex­port to other coun­tries through the Pak­istani port of Gwadar is a fur­ther ad­van­tage. TAPI is con­sis­tent with the US de­clared pol­icy of link­ing Cen­tral and South Asia and di­ver­si­fy­ing ex­port routes for Turk­men gas. For a num­ber of coun­tries, TAPI could pro­vide busi­ness op­por­tu­ni­ties in con­struc­tion and op­er­a­tion of the pipe­line.

How­ever, the ma­jor in­sur­gen­cies along the TAPI route in Afghanistan and the tribal ar­eas of Pak­istan ap­pear as a chal­lenge. But the mem­ber coun­tries along with the in­ter­na­tional me­di­a­tory bod­ies are en­gaged in ex­tract­ing po­lit­i­cal so­lu­tions. One such ex­am­ple is the strat­egy of national rec­on­cil­i­a­tion of­fered at the ‘ Lon­don Con­fer­ence on Afghanistan’. Sim­i­lar po­lit­i­cal res­o­lu­tions are re­quired to be stressed on for the geopo­lit­i­cally sig­nif­i­cant project of TAPI; a hope for en­tire re­gion

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