PEW says heavy investment in risky TAPI project should be reconsidered

ISLAMABAD: The Pakistan Economy Watch (PEW) on Saturday said authorities should reconsider commencing construction work on the $10 billion Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project.

The 1,814 km pipeline which was planned to carry 33 billion cubic meters of gas annually has suffered many delays due to financing problems and security risks, it said.

“The pipeline crosses through lawless Afghanistan which poses serious security threats, therefore, cash-strapped Pakistan should try alternate solutions to satisfy its energy demand,” said  PEW President Dr Murtaza Mughal.

Some countries continue to enjoy influence in Afghanistan who may not like the flow of a huge quantity of gas to Pakistan putting all the efforts in jeopardy, he said.

Murtaza Mughal said that the original plan for the pipeline has been changed to save costs and now no compressors would be installed which will reduce the gas volume substantially.

He said that Pakistan cannot afford to be burdened with 56 inch TAPI gas pipeline at a time when it is trying to raise 12 billion dollars from international institutions to avoid bankruptcy.

Investment in the project can be delayed until the country has the comfortable level of fiscal space and forex reserves and situation in Afghanistan is relatively better.

He asked why could Pakistan not complete the pipeline with next-door Iran discounting US opposition to the project.

Pakistan currently meets just 15 per cent of its petroleum demand with domestic crude oil production, while 85 per cent of its demand is met with imports which results in a large current account deficit.

“Increasing the share of gas is good for balancing the energy mix which is heavily tilted towards crude but it should not be at a heavy cost of venturing into destabilised and ungovernable regions,” he cautioned.