TAPI pipeline breaks ground

Leaders of Turkmenistan, Afghanistan, Pakistan, and India broke ground yesterday in a special ceremony for a $10 billion gas pipeline project. The 1,800-km-long pipeline is being constructed to ease energy deficits in South Asia and freeze tensions in the conflicted region. The annual capacity of the pipeline will be 33 billion cubic metres, and it is planned to start functioning by the end of 2018.

It is important to note that several major energy companies from the West are out of the project. Total, Exxon-Mobil, and Chevron will not follow this project. Only the Dubai-based Dragon Oil, which works in Turkmenistan's petroleum sector, will invest in the project that was confirmed in November. Turkmengas owns an 85% stake in the project. Afghanistan, Pakistan and India own 5% each.

Background

The idea of the project was developed in the 90's. A memorandum of understanding between Turkmenistan and Pakistan was signed in March of 1995. Immediately, competitive bids began. Bridas Corp. from Argentina promoted this project, but US's Unocal and KSA's Delta signed separate agreement with Turkmenistan. Central Asia Gas Pipeline, Ltd. (CentGas) led by the US, was formed in August 1996. In Jan. 1998 the Taliban also signed this project, but after attacks of Al-Qaeda on the US, and because of safe heaven provided to Osama bin Laden by the Taliban, Unocal withdrew from the consortium. After 9-11 and the American invasion of Afghanistan, British and US companies became interested in project again. But now the US is skeptical of this project starting. India joined this project in 2006 because of its fast growing energy needs. In the last 7 years were hot discussions between participants of the project, surrounding transit fees, approval of the agreements in parliaments, and the organization of the operation itself.

Interests

Turkmenistan's main sources of revenue are oil and gas exports, which constitute 90% of the country's export revenues. For last few years it was reduced, because of down-turn of oil prices. On the other hand, Turkmenistan feels the rising dependence of China, because 75% of its gas export is to this country (the Central Asia - China pipeline). Last time there was tension between Russian Gazprom and Turkmenistan, Gazprom was claimed by Turkmen's media to be an "unreliable partner". Historically, Russia has used Turkmen gas for transit into European countries.

Afghanistan and Pakistan are interested in using this project for gaining access to cheap gas, creating working places and collecting transit fees from India.

India's expectation is clear - the rise of the industrial sector needs more energy supplies. Because of geographic specifics (mountains and at least two transit countries), it is not easy for India to get Russian gas as it is for China.

Another regional actor is Iran. There is the IPI (Iran-Pakistan-India) project that is still not realized. Tehran was very suspicious about the Western role in the TAPI project and claimed it as attempt of the isolation of Iran.

There are also neighboring countries that will not benefit from this project. Turkey and Azerbaijan are two who expected to get more gas from Turkmenistan than their own needs require, and transit the balance to Europe. Now it is clear that Turkmenistan is looking East.

Kazakhstan and Uzbekistan are also out of the game.

Western interests are to control every actor in the region and to manage the interests and conflicts. Because no western companies will participate in TIPI, the State Department will not promote it as there will be less space for Washington's activities.

Geography, politics and security

TAPI pipeline is planned to start from Dawlatabad, Turkmenistan and via Faryab, Mazar-e-Sharif, Samangan, Parwan, Kabul, and Jalalabad, on to Pakistan, and then onward to India. But the direction was changed and in the final version it will go through Afghan Herat, Helmand and Kandahar provinces to Quetta, Pakistan, and will then enter India via Punjab, Pakistan.

The security of the pipeline is still a high priority, because Afghanistan and Pakistan are still effected by activity of the Taliban and Islamist armed groups, incl. terrorist organizations that have attacked India before.

On Dec. 9th, India confirmed that it will transfer four Mi-25 gunships to Afghanistan, marking the first time New Delhi has sent lethal weapon systems to Kabul. The move comes after Russia, the initial manufacturer, gave consent for the transfer. Until now, India has limited itself to providing training and non-offensive supplies to Afghanistan.

In 2014 the Afghan government announced that will provide 7,000 security personnel for the protection of the pipeline in Afghan territory.

Pakistan's security plan is linked with China. Because of the Gwadar sea port operated by China, and transport routes inside the country, there will be a deployment of Chinese armed forces and security firms to control this vital route from the sea coast the south to the Pakistan-China border to the north.

It is interesting that the ground-breaking ceremony was held in the historic Silk Road city of Mary - earlier known as Merv. Because China leads the New Silk Road project, and because there is a US backed initiative with the same title, the area seems like a zone of active rivalry for the routes of energy supplies, trade and investment.

Forecast

TAPI may serve as fuel for economic and social development in the region and may increase cooperation among regional states. As a result we may see a new Central Asian geopolitical pole emerge, separated from the Greater Middle East. It will be possible only after conflicts in Afghanistan and Pakistan are resolved, and the possible involvement of the other Central Asian countries. The region also may be consolidated under Eurasian integration, at least as a southern Eurasian part without a Russian role. But Russia as well as Iran and China may work to strengthen this project too.

At the BRICS/SCO summit in Russian Ufa, it was announced that the Moscow led project of the Eurasian Economic Union will be coordinated with the Chinese "New Silk Road". China is also developing a sea part of this project, better known as the "String of Pearls". The sharing of roles and cooperation on regional security issues may have benefits for all actors, if it will follow ideas of multipolarism and respect for the interests of all parties.

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TAPI pipeline breaks ground

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