TAPI gas pipeline facing funding issues

Islamabad, Pakistan: Turkmenistan-Afghanistan-Pakistan-India — TAPI gas pipeline project is still facing funding issues although the financial closure of this $10 billion project in scheduled before the end of this year.

A United Nations Development Program (UNDP) report indicates that the traditional approaches to public-private partnerships may not fully cover the framework of this project.

TAPI project has deep geopolitical interests as it was launched as in 1995 to keep Iran and Russia away from energy markets of central Asia and South Asia. TAPI was introduced by NATO allies through international lenders as competitor to Iran Pakistan India (IPI) Gas Pipeline project but India withdrew from IPI in 2009 over the alleged pressures of United States while Pakistan avoided to announce its separation from IPI but halted the project for indefinite period due to perceivable pressures from United States although Iran completed its pipeline from pumping point to border of Pakistan.

The 1,814-kilometer long TAPI pipeline will go through war-ridden Afghanistan and will reach India from Turkmenistan. The Turkmen section of TAPI began to be built in December 2015, and the Afghan section was initiated in February 2018.

War is continuing in areas from where TAPI Gas Pipeline will run through Afghanistan and security of the project is hampering the interests of foreign investors.

Asian Development Bank promised over $1 billion for this project worth $10 billion and discussion with international credit agencies like SACE, Hermes and ECIO are in progress for financial closure of this project before the end of year 2018.

It is pertinent to mention that a road show is being organized soon to showcase TAPI for finding investment for this project without delay. Turkmenistan has already completed its part of construction of Pipeline.

Turkmenistan is in dire need to sell its gas to Afghanistan, Pakistan and India through TAPI because the biggest buyer of Turkmen gas— Russia completely stopped buying gas from Turkmenistan in 2016.

TAPI gas pipeline facing funding issues
TAPI gas pipeline facing funding issues

TAPI project has an interesting history since the days it was conceived as US backed project to keep Iran and Russia from energy market of Central Asia.

The original project started on March 15, 1995 when an inaugural memorandum of understanding between the governments of Turkmenistan and Pakistan was signed and soon an Argentinean company Bridas Corporation initiated work on the project but Bridas was replaced with U.S. company Unocal (in conjunction with the Saudi oil company Delta) by Pakistan due to alleged pressure from United States. Unocal withdrew from the project on December 8, 1998 and the project went into cold storage.

According to latest map, TAPI pipeline will be constructed alongside the Kandahar–Herat Highway in western Afghanistan, and then via Quetta and Multan in Pakistan. The final destination of the pipeline will be the Indian town of Fazilka, near the border between Pakistan and India.