Pakistan signs $7.6 billion TAPI gas pipeline agreement

President Asif Ali Zardari shaking hands with President of Turkmenistan Gurbanguly Berdimuhamedov. PHOTO: APP
ASHGABAT: The leaders of Afghanistan and Pakistan agreed on Saturday to construct a gas pipeline through Afghanistan’s war zone, supporting a US-backed project to help the regional economy using abundant Turkmen gas reserves.

India, the final country along the 1,735-km (1,080-mile) route of the TAPI pipeline, also sent its oil minister to approve a project designed to feed growing Asian markets with gas pumped from the world’s fourth-largest reserves of the fuel.

But the intergovernmental agreement signed in the Turkmen capital Ashgabat contained no specific provisions for security, volumes or gas prices. The partners must also secure funding for the pipeline, which will cost upward of $3 billion to build.

The proposed Afghan section of the pipeline runs through southern Taliban heartlands where the central government has only a tenuous grip, despite the presence of tens of thousands of foreign troops meant to bolster security.

“We will make every effort for security during and after construction,” Afghan President Hamid Karzai said.

Turkmenistan, a former Soviet republic sitting on 4 percent of the world’s natural gas reserves, plans to triple gas output to 230 billion cubic metres (bcm) over the next 20 years. With a population of only 5 million, it will export nearly 80 percent.

Turkmenistan traditionally sends its gas north to Soviet-era master Russia but is becoming an increasingly important supplier to China, Iran and Europe. India and Pakistan, via the TAPI pipeline, would also offer potentially large new export markets.

Susan Elliott, US deputy assistant secretary of state for South and Central Asian affairs, told an energy conference last month the project was “a good example of how Turkmenistan’s resources could benefit other countries in the region”.

Turkmen President Kurbanguly Berdymukhamedov said he had also offered to supply electricity across the border and host United Nations-sponsored negotiations and training programmes to help revitalise the Afghan economy.

“In a country where an entire generation has grown up knowing only the business of war, it’s imperative that we find a way to put peaceful professions to use,” Berdymukhamedov said in comments published on government website www.turkmenistan.gov.

He later said at the signing ceremony: “TAPI is not only an issue of energy security. It has geopolitical significance.”

Security, finance

Parts of the Afghan stretch of the pipeline will be buried underground, while local communities will be paid to guard it from attack as it snakes from western Herat, near the border with Iran, through the volatile regions of Helmand and Kandahar.

“We shouldn’t miss this opportunity,” Pakistani President Asif Ali Zardari said via an interpreter. “We know that, if the economy is weak, extremism will grow.”

Petroleum and Natural Gas Minister Murli Deora represented India at the signing ceremony with the three national leaders. As well as the intergovernmental agreement, the four countries’ oil ministers signed a Gas Pipeline Framework Agreement.

Details, however, were scarce. Neither a start date nor an agreement on gas volumes was announced. Turkmenistan says the pipeline will be able to pump 33 bcm annually, while India and Pakistan have expressed interest in buying up to 70 bcm.

Financing will also be key. Turkmenistan has previously estimated the cost of the project at $3.3 billion, although various estimates have costs running as high as $10 billion. The project is backed by the Asian Development Bank (ADB).

When Berdymukhamedov noticed ADB President Haruhiko Kuroda hanging back as the leaders signed the agreement, he offered his hand and said: “You’re important.”
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