Amidst much fanfare, an inter-governmental agreement (IGA) and Gas Sales Purchase Agreement (GSPA) on the Turkmenistan-Afghanistan-Pakistan-India (TAPI) was signed in Ashgabat on December 11 as planned. Turkmenistan, the host country, as well as Pakistan and Afghanistan were represented by their respective presidents.
India had dispatched her Minister for Petroleum, Murli Deora as Prime Minister Manmohan Singh was attending the EU-India summit. There is a consensus that the TAPI project, if implemented, would reflect a win-win scenario for all the regional countries with the energy-rich Turkmenistan supplying to the three energy-deficient South Asian countries. The project is estimated to cost 7.6 billion dollars and is targeted to deliver 33 billion cubic meters (BCM) a year from the Daulatabad fields in Southeast Turkmenistan.
This project was conceptualised in the mid 1990s, but was stalled for over 15 years. The reasons were manifold. First and foremost, the security concerns associated with the three importing countries were considered to be significant. TAPI's pipeline route lies through what are known as Taliban strongholds, namely Kandahar and Helmand. The question as to whether the Afghan government and the allied forces, currently stationed in the country would be able, in terms of available manpower and willingness, to deploy thousands of personnel to provide security during the construction and later protection to the pipeline remains dubious. However, the Afghan government has committed to paying local communities to guard the pipeline, which would be buried underground, making it harder to attack. Pakistan, too, is susceptible to terror attacks and our gas pipelines continue to be a victim to terror attacks by the Baloch insurgents, as well as from the Pakistani Taliban. And India almost routinely expresses security concerns with respect to any pipeline that passes through Pakistan. However, there is agreement that the security costs of the project would add significantly to the cost of the project.
Such tangible concerns notwithstanding, the US fully supports this project. Susan Elliott US Deputy Assistant Secretary of State on South and Central Asian Affairs, at an energy conference in Turkmenistan last month stated "The (pipeline's) route may serve as a stabilising corridor, linking neighbours together in economic growth and prosperity." She, however, warned that "The road ahead is long for this project but the benefits could be tremendous and are certainly worthy of the diligence demonstrated by these four countries so far."
There was a long period of skepticism (led by ADB) and some spoil-sports in our own officialdom regarding the adequacy of Turkmenistan's gas reserves and that country's ability to meet its commitments of supply. Numerous studies were made, but the doubts lingered, till it was established that Turkmenistan's gas reserves are the fourth largest in the world - after Russia, Iran and Qatar, to dispel the rumour-mongers!
The last impediment to the proposed pipeline was the deal that Russia's Gazprom had made with the Central Asian Republics contiguous to Afghanistan a few years ago: to purchase their surplus energy in an effort to forestall any US-backed proposals to sell to energy-deficient South Asia. However, Moscow significantly reduced its purchases in 2009, following a pipeline explosion as well as a price row with Turkmenistan. As a result, Turkmenistan's total gas exports have dropped to one-quarter of 2008 levels, according to the US Energy Information Administration. Skeptics argue that Russian concerns, with respect to growing US influence in its backyard, remain and may well compel Gazprom to, once again, make a deal with Ashgabat. The fact that the laying of the gas pipeline is a four to five-year project gives ample time to Gazprom to scuttle the project at a later stage, if it wants to.
Analysts in Pakistan argue that the signing ceremony in Ashgabat represents a successful outcome of sustained US support for the project - support channelled through the multilateral Asian Development Bank - that would challenge the rival project Iran-Pakistan (IP) pipeline. Be that as it may, Pakistan's energy deficiency not only continues to compromise the country's productive capacity and thereby increase unemployment levels, but also causes continued disturbance to the householder. While part of the reason for the energy shortage lies with the government's failure to deal with transmission losses as well as the rising circular debt that has led to inability to purchase the basic input required by the energy sector due to lack of funds, problems that need to be dealt with, prior to the TAPI becoming operational. Yet, undoubtedly, TAPI could solve our energy problems to a large extent. It must therefore be lauded.
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