Pakistan could quit TAPI as India now “extremely lukewarm” on gas pipeline project, says report

Pakistan could quit TAPI as India now “extremely lukewarm” on gas pipeline project, says report
Turkmenistan's ambition to export to South Asia gas from its Galkynysh field, one of the biggest gas fields in the world, could be doomed. / DQttwo, public domain
By bne IntelliNews November 12, 2024

Pakistan is pondering quitting the Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline project as officials feel India may have gone “extremely lukewarm” on the investment and, without the participation of New Delhi, it would not make economic sense to Islamabad.

That’s the TAPI state of play as reported by Pakistani newspaper The News.

If the multi-billion-dollar project collapses, it will come as a huge blow to Turkmenistan. The project was first put forward nearly 30 years ago. Since then, the Turkmen have been trying to overcome challenges largely caused by the security situation in Afghanistan to get the construction of the 1,849-kilometre (1,149-mile) pipeline, expected to cost at least $10bn, under way in earnest. With only China as a major customer for its abundant gas, Turkmenistan badly needs to diversify its gas export market coverage.

The News said “top functionaries” in Pakistan were mulling exiting TAPI, as “TAP” would not be sustainable, given that Pakistan would lose a gas transit fee payment of $500mn per annum from India.

There are reports that India has been exploring other options to diversify its energy mix, including imports of liquefied natural gas (LNG), renewable energy projects and other regional energy corridors. Pakistan too appears to be taking a long hard look at LNG potential.

In September, Turkmenistan and Afghanistan’s Taliban administration announced the construction launch for the Afghan section of TAPI—only, as Central Asia expert Bruce Pannier pointed out in bne IntelliNews, the announcement “barely elicited a yawn” given that this was actually the second time such a construction start had been announced over the years and veteran TAPI watchers did not expect things to progress meaningfully.

Pakistan has several times announced the start of construction work for its section of TAPI several times, but actual work on rolling out the pipeline has in fact never started outside Turkmenistan, beyond ceremonial welding of pipe segments.

 

After the Taliban regained control in Afghanistan in 2021, the security situation along the proposed TAPI route improved, but it became more difficult to find foreign investors to finance the mega-infrastruture since the Taliban government remains under international sanctions.

If TAPI was up and running, project specifications envisage that Turkmenistan would be selling an annual 3bn cubic metres (bcm) of gas to Afghanistan 30 bcm/year that would be equally shared by Pakistan and India.

According to Turkmenistan’s Energy Institute, the country’s gas exports in 2023 reached 39.5 bcm. Almost all of that went to China,

Iraq's Ministry of Electricity announced in mid-October that it has signed a deal with Turkmenistan to secure up to 20mn cubic metres of gas per day, with the deliveries contingent on swap arrangements with Iran.

News

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