Benefits outweigh the costs
Several countries are making tremendous efforts to overcome their energy shortage, which they are currently facing or which they expect to face in the near future. For the past seven years, Pakistan has been suffering from a dire energy crisis because the country did not increase its energy capacity. This is not only affecting different sectors of the economy, but also diverse segments of society.
By 2050, Pakistan’s electricity requirements will grow three-fold. If sufficient resources are not allocated and utilised effectively and efficiently, the energy crisis will further aggravate. Beyond installing energy production units indigenously, importing energy (though unreliable) is a quick solution to be relied on. Therefore, it is required to analyse the accessible choices to import energy from the neighbouring countries in order to meet the current and future energy needs of the country.
In the South Asian region, Pakistan and India are the two major energy consumers and they are getting increasingly dependent on imported oil and natural gas. Liquefied natural gas is an expensive source as compared to the mechanism of gas pipelines, which costs in the range of $16 to $18 per million British thermal units (mmbtu). The Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline is a major project being pursued, which would be the beginning of a new era of cooperation and interconnectedness at the regional level.
China also expressed interest in becoming part of the TAPI pipeline project. The extension of the pipeline to China through Gwadar will give a boost to economic activities in Balochistan. The pipeline will connect a wider region if Bangladesh formally joins it.
The 1,800-km-long pipeline is to begin from Turkmenistan’s Dawlatabad area’s Galkynysh field, better known by its previous name, South Yoiotan Osman. It holds estimated gas reserves of 16 trillion cubic feet. From the field, the pipeline will run to Farah, Herat, Kandahar and Helmand provinces of Afghanistan, before entering Pakistan. It will reach Multan via Quetta in Pakistan, before ending in Fazilka (Punjab) India. It will have the capacity to transfer 90 million standard cubic metres gas a day (mmscmd) for a 30-year period and would be operational in 2018.
However, unfortunately, the prevailing geopolitical scenario in the region has put a question mark on the commencement and completion of the Iran-Pakistan-India (IPI) gas pipeline project, another important venture connecting gas fields in Iran, Pakistan and India. Apart from geopolitical scenario, there is a lack of political will in Pakistan to go ahead with that program. Nonetheless, as an alternate to IPI, the TAPI gas pipe-line project needs to be materialised at a faster pace in order to meet the energy requirements and to cope with the energy crisis of Pakistan.
Pakistan, through the TAPI project, would receive 1.365 billion cubic feet of gas per day (bcfd), India would get 1.365 bcfd and Afghanistan will receive 0.5 bcfd through Turkmenistan. Afghanistan will annually receive $450 million under this agreement. It is a vital project for the country as it would generate employment for thousands of Afghan youth. For the purpose of safeguarding the pipeline, around 6,000 Afghan Security Forces will be deployed.
The US and its allies want Pakistan to step down from the IP and pursue TAPI because the main financial control over Turkmenistan gas reserves lies with giant western companies. The US has been opposed to the Iran-Pakistan gas pipeline because of Iran’s nuclear programme, which is at the heart of international controversy.
Against this backdrop, TAPI has got intense support from the US for the recent operational agreement between the four countries. It is an ideal scheme between these countries to overcome their respective energy shortages. The US interest was very deep in reaching the agreement because of the award of the multi-billion-dollar project to two US firms – Chevron and ExxonMobil –which are currently in the race to win it and become consortium leaders as well as to finance the pipeline’s laying.
Pakistan, through the TAPI project, would receive 1.365 billion cubic feet of gas per day (bcfd), India would get 1.365 bcfd and Afghanistan will receive 0.5 bcfd through Turkmenistan. Afghanistan will annually receive $450 million under this agreement.
China also expressed interest in becoming part of the TAPI pipeline project. The extension of the pipeline to China through Gwadar will give a boost to economic activities in Balochistan. The pipeline will connect a wider region if Bangladesh formally joins it.
While TAPI seems extremely attractive in theory, there are some serious challenges that have to be overcome by the countries involved. Even if there is international support and financing for the project, security is difficult to guarantee. TAPI has economic and geopolitical significance, subject to improved security situation in Afghanistan and law and order situation in Balochistan. As a comparison between the IPI and TAPI routes, the IPI pipeline route go as by more disturbed areas of Balochistan, whereas this concern is less visible with TAPI, considering that its route will go by the more stable areas of the province.
The prospects for the Iran-Pakistan-India pipeline project are bleak due to several international compulsions, particularly strong US objections. Therefore, the stakeholders of TAPI should make a combined endeavour for the construction of this pipeline. This project will bring regional stability that will ultimately lead to peace and prosperity. TAPI has the potential to create a joint economic ring in the region and, in the long-term, the economic profits will guarantee regional security.
TAPI provides plausible economic opportunities to Pakistan, India and Afghanistan. It may transform India-Pakistan relations by enhancing interdependence in the energy sector and the economic field. Due to more economic opportunities, new markets will be opened for landlocked Turkmenistan as it can extend its exports to the east where there is a remarkable demand for energy.