Afghan lawmakers on April 30 voted to approve the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline agreement. The Afghan parliament's International Liaison Commission said the agreement will boost the country's economy and strengthen relations between the four nations involved in the project. About 7,000 personnel will be assigned to ensure security for the project in Afghanistan, said Muhammad Anwar Akbari, a member of the commission. The cost of the project is estimated at around $7.8 billion, with construction to begin by 2012 and completion projected for 2014. Reports referenced an unnamed "American firm" that will be involved in building the pipeline.
The TAPI pipeline will transport over 30 billion cubic meters of gas annually from Turkmenistan's Dauletabad gas fields. Afghanistan's President Hamid Karzai called it "a highly important project" and assured "efforts to ensure security both during construction and after completing the project." The pipeline will follow the highway running from Herat to Kandahar, go through the Pakistani city of Quetta, and end in Fazilka, on the India-Pakistan border. (Pakistan Express-Tribune [2], May 1; The Hindu [3], April 23)
India is hosting talks to determine a Gas Sale and Purchase Agreement (GSPA) for the project. The four countries, which in December signed Inter-Governmental Agreement (IGA) and Gas Pipeline Framework Agreement (GPFA), are to jointly form a consortium for the 1,735-kilometer pipeline. (Pakistan Express-Tribune [4], April 26)
Pakistan and Kuwait are this month to sign a Memorandum of Understanding (MoU) on under which Kuwait will provide financial and technical assistance for both the TAPI and the Iran-Pakistan (IP) pipeline projects. All participating countries are scheduled to meet in Afghanistan May 13-14 to resolve the issue of gas pricing and finalize the GSPA. (Pakistan Express-Tribune [5], May 6)
A Jan. 11, 2010 Financial Times [6] editorial stated:
There is a long history to the proposal, which dates back to 1998 (when a Unocal-led consortium was formed to build the pipeline and the Taliban signed an agreement allowing the project to proceed, actually sending representatives to Washington to discuss the pipeline with the Clinton administration). Instability in Afghanistan, however, caused major players in the consortium to withdraw.
It is now 12 years since the first agreement to deliver natural gas through Afghanistan was concluded. The need for the gas is even more pressing and the benefits to all the parties involved just as positive. Leadership is required to make the pipeline a reality. Mr Obama has the opportunity to take the lead—militarily to protect the pipeline, financially by adding US Export-Import Bank financing to the consortium, and diplomatically by inviting all stakeholders to the table (including representatives from each of the major Afghan tribal groups and from the Taliban).
The risks attached to this project are considerable but not insurmountable. These risks pertain to the security aspects and the investment climate in the region. The example of the Baku-Tbilisi-Ceyhan pipeline is instructive when addressing both the security and financial aspects of the trans-Afghan pipeline. Like it, the trans-Afghan pipeline will be buried below ground, thus protecting the entire route from above-ground sabotage. Like it, Washington can spearhead the financing of this project. This will also allow US companies to participate and create jobs within the US...
Now, however, US corporations only seem to be involved in construction of the pipeline, not actually providing the gas. India is to be the chief consumer of the gas, and is negotiating directly with Turkmenistan's government over the price. Gas from Turkmenistan's giant Dauletabad field and its South Yolotan-Osman is also to be supplied to Afghanistan and Pakistan in lesser quantities. (Central Asia Online [7], April 28; Central Asia Energy Newswire [8], April 25)
See our last posts on Afghanistan [9], the TAPI [10], and the regional pipeline wars [11].
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