Talks over TAPI pipeline gather steam with Taliban at the helm

Talks over TAPI pipeline gather steam with Taliban at the helm

With the Taliban spokespersons in Afghanistan talking favourably on the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline, expectations of it coming closer to India have grown. The TAPI pipeline is among the three transnational pipelines that have been on the drawing board for long.

These can assist in India’s quest for agas-based economy, even though transnational pipelines are difficult to plan and harder to implement.

“The TAPI project had regained steam a few years ago, but there has been an eerie silence from India on this front lately. It seems the government wants to see if the Taliban are really serious about this project and what form of governance they adopt. Whether they want and are eligible to do business with India is something that requires a waitand-watch approach,” a former Indian government official told Business Standard .India’s plans for a gas-based economy are hinging on assured affordable gas supplies to ensure consumers make the shift to natural gas. Prime Minister Narendra Modi has reiterated the goal of a gas-based economy multiple times. The target is to take the share of natural gas from around 7 per cent to 15 per cent in India’s energy mix.

“This will largely be on the back of imported liquefied natural gas (LNG) as domestic supplies of natural gas will be depleted in the next five years,” an official at Petronet LNG, India’s largest gas importer, said. While imported LNG is an option available for India, its affordability and price stability have been a matter of concern across the world.

The TAPI pipeline project has been in talks for almost three decades. The governments of Afghanistan, Pakistan, and Turkmenistan in 2001 requested the Asian Development Bank (ADB) to act as the secretariat for the Steering Committee of the proposed Turkmenistan-Afghanistan-Pakistan natural gas pipeline. India was invited in March 2003 to join what became the TAPI pipeline. In its present proposed form, the TAPI pipeline will extend over 1,600 km.

Afghanistan, India, Pakistan, and Turkmenistan decided to jointly invest in setting up the TAPI Pipeline Company (TPCL) in 2013. It was agreed in 2016 that Turkmenistan’s Galkynysh Pipeline Company will hold 85 per cent of TPCL, and that the Afghan Gas Enterprise, Pakistan’s Inter State Gas Systems, and India’s GAIL each will hold 5per cent. The estimated total project cost stands at $7.7 billion.

“Major economies from the European Union to China, that are deficient in natural gas, meet a significant part of their requirements through pipelines. This insulates them from major price variations. So, when spot LNG prices zoomed to $30 per million British thermal units (mBtu), the gas price for pipeline consumers remained at much lower levels,” a sector watcher noted. This is an idea that India has been playing with for a while and TAPI is not the only ambitious pipeline project that India has been eyeing. The IranPakistan-India (IPI) pipeline was also one such initiative. This plan appears to be on the back burner for now.

“The US did not want Iran to be encouraged with either the IPI or direct deep sea pipeline to India and pushed through the TAPI project with the backing of the Asian Development Bank. But that is a security nightmare,” former petroleum secretary T N R Rao said.

“The problem with IPI was that it goes through one troubled country  Pakistan. But the problem with TAPI is that it goes through two troubled countries  Pakistan and Afghanistan,” said Dinakar Srivastava, India’s former Ambassador to Iran from 2011 to 2015.

Commenting on the economics of piped-based gas and how it remains more affordable than imported LNG, Srivastava said, “While prices are not disclosed, you can take a cue from the fact that Germany has gone ahead with the Nord Stream 2 pip e line, despite much opposition from both the US and Ukraine. So, obviously they find it cheaper. The average LNG prices over the past four-five years have hovered around $7-8 per mBtu. That is a price that piped gas can match and even bring it down.”

Share Button

Leave a Reply