The Pakistan government has awarded the contract for laying the Turkmenistan-Afghanistan-Pakistan (TAP) gas pipeline project to the US-based International Oil Company (IOC), which is estimated to cost $10 billion. A local TV channel has quoted a press release issued by the oil company's liaison office as stating that the 2,200-km TAP pipeline will be completed in three years.
The mega project also involves construction of two oil refineries and four thermal powerhouses, with a 1,000-MW capacity. Further, the pipelines would be constructed up to Gwadar and would supply two million barrels of oil and four billion cubic feet of natural gas to Pakistan per day.
According to APP, a $3.5 billion refinery will also be constructed at Gwadar under the terms of the contract. Matters relating to security and insurance in Afghanistan during the laying of the pipeline have been finalised between the oil company and the authorities, and a signing ceremony confirming the agreement on the mega project would be held shortly.
The pipeline from the world's fourth largest gasfield in Daulatabad in south-east Turkmenistan will pass through Herat/Kandahar in Afghanistan to Quetta-Multan in Pakistan. The pipeline will also be extended to the seaports in Pakistan for shipment of gas to other Asian markets.
The ADB-funded pipeline would move up to 30 billion cubic meters of gas per year from Turkmenistan to Afghanistan and Pakistan. The plan is to transport gas produced in Daulatabad field to the under-supplied markets.
The TAP project does not represent the first attempt to lay a gas pipeline from Turkmenistan to Pakistan via Afghanistan. The first multinational to enter the field was the Argentinean oil company, Bridas, which won exploration rights to Turkmen gasfields in 1992, and planned to transport gas to Pakistan, and eventually to India.
However, the plan could not get off the ground, as Afghanistan was embroiled in a bloody civil war at that time, and the government of Burhanuddin Rabbani in Kabul was at odds with Islamabad. Later, a consortium led by the US oil company Unical and Saudi company Delta Oil also entered the pipeline scene, but the mega project could not materialise because of different factors.
The Daulatabad gasfield is considered to be one of the largest gasfields in the world. Studies conducted by an internationally recognised firm show that the gas reserves are adequate for 30 years or more. And the Turkmen government has informally guaranteed 25 trillion cubic feet of natural gas exclusively for the TAP pipeline.
However, the viability of the project is closely linked to the restoration of a peaceful and stable politico-administrative environment in Afghanistan. Further, out of the various proposed pipelines from the newly independent oil-rich states of Central Asia, TAP pipeline is believed to be the most feasible both in terms of cost and the revenue it will generate.
According to an expert, the best market for the Caspian oil and gas is in the South and Southeast Asian region, because oil and gas could be easily and cheaply shipped from the Pakistani coast to other countries. Investment in the Asian energy market would thus amply pay off.
The US-led coalition's military campaign in Afghanistan, which started in October, 2001 has meanwhile drastically changed the geostrategic landscape of the region.
The major developments since then include the arrival of US troops in the region, and the securing of military bases in Afghanistan and Central Asia; the ouster of the hard-line Taliban regime; the installation of a pro-US government at Kabul; and the destruction of al Qaeda network in the country.
Simultaneously with these developments in Afghanistan, international efforts were revived for resuming talks on the abandoned TAP pipeline project. Many analysts, therefore, believe that apart from fighting terrorism in the region, the US also wants to access, control and regulate the energy resources of Central Asia.
An important development with regard to the revival of TAP project was the signing of a Pak-Afghan-Turkmen agreement at Ashakabad on December 27, 2002. This agreement provided the framework and the final go-ahead signal from the heads of government of the three concerned countries, while the interest of some international companies in the project showed their readiness to implement the practical work on the project.
It cannot be denied that TAP project has immense economic potential for the entire region. If it is implemented as planned, the opportunities that will be opened up will be enormous not only for Afghanistan, but also for the whole of Central and South Asia.
In view of the prevalent ground realities in Afghanistan in particular, and the region in general, there is a cautious optimism about the future of the project. All the stakeholders need to make concerted efforts to ensure successful completion of the TAP pipeline project.