Will TAPI Pipeline Make a Mint for Partners?

If -- and it’s a big if -- the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline moves from being a figment of inter-governmental imagination to being an actuality of pipe full of actual gas, Kabul stands to make a mint.

Turkmenistan stands to make a lot of money too, but not as much as it would like.

In 2008, Ashgabat was looking for $457 per ton of gas. Sources quoted by The Economic Times, an Indian business paper, however, suggested on December 13 that Ashgabat would sell gas for TAPI at a rate of $272 per thousand cubic meters (tcm). (By contrast, the rate Turkmenistan agreed for China was only $195 per tcm.)

Delhi should expect to pay $362 per tcm by the time charges and transit fees to Afghanistan and Pakistan are factored in, however. Turkmenistan wants to sell 33 billion cubic of meters of gas to India and Pakistan. Afghanistan wants to rake in transit fees ranging from a $1 billion to $1.4 billion annually. Pakistan and India want to keep gas prices for their ever growing number of consumers low and 33 billion cubic meters should just about do it.

But is the promise of $1.4 billion in transit fees enough to bring stability to southern Afghanistan, the persistently volatile area, through which the pipeline must pass? Some Afghan observers say it might be.

Others say the TAPI is just another flammable item in an explosive region.

“The situation in southern Afghanistan is no more stable now as it was when Bridas and UNOCAL were duking it out for control of the pipeline,” Candace Rondeaux, International Crisis Group’s senior analyst in Kabul, told EurasiaNet.

“Internally, of course, no one can say for certain how to stabilize Nimroz, Helmand, and Kandahar enough that work could begin on such an
enterprise. Underlying this project is the hope that it will act as a unifier of interests. But economic success in this case depends very much on political success in the south and while the U.S. refuses to understand the strategic importance of enhancing enfranchisement as a whole in South Asia it is unlikely that a project as ambitious in scale as TAPI will succeed,” she added.