When Will TAPI Construction Begin?

 
 

For all of the issues buffeting the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline – from price disagreements to construction concerns to the violence expanding throughout northern Afghanistan – the project just won’t quit. Despite its continued delays and ballooning costs, the affiliated governments behind TAPI continue to push the project, regardless of the issues extant. Turkmenistan President Gurbanguly Berdymukhamedov confirmed earlier this week that construction on TAPI – slated to run some 1,800 km and transit Turkmen gas to its three southern neighbors – would push past the struggles remaining and begin this December. Berdymukhamedov ordered Turkmengaz and Turkmengazneftstroi, as the Pakistan Tribune noted, “to begin building [Turkmenistan’s] section of the pipeline.” The decree, as the Tribune added, came following a high-level meeting in Istanbul with representatives from the four countries, and hews to the planned completion by 2018.

The announcement confirms the sense of antsiness on Ashgabat’s side. Between sagging hydrocarbon prices and the prospect of an opened Iran as a new competitor to Turkmenistan’s fields, Ashgabat’s window of opportunity for supplying its southern neighbors is fast closing.

But violence around Kunduz and hesitancy at involving foreign energy majors are no longer the only, or even the major, issues pausing TAPI’s construction. As detailed in India’s Economic Times, New Delhi – one of TAPI’s most vocal backers – is suddenly getting cold feet about TAPI’s current set-up. According to a governmental source, India wants a renegotiation of TAPI’s planned pricing scheme to bring the current schematics more in line with pricing around liquefied natural gas, which remains substantially lower. “The gas price should reflect the new realities,” the source said. Considering the pricing plan was reached in 2012 – well before hydrocarbon prices collapsed – India’s point isn’t without merit. Likewise, the complaint may well be a stalling tactic, allowing New Delhi to watch where and how Iran begins opening its reserves to neighboring markets. (Namely, through a potential land-sea route Indian Prime Minister Narendra Modi earlier suggested.)

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India knows full well that a buyer’s market remains dominant within gas markets, and that Turkmenistan has boxed itself into a corner with its heavy reliance on the Chinese market. But New Delhi’s new reticence presents yet another blow to TAPI – which, in turn, remains a primary component of the United State’s New Silk Road Initiative in Central Asia. Considering Secretary of State John Kerry’s recent visit to the region saw little tangible outcomes, it seems fitting that one of the primary regional projects backed by the U.S., official rhetoric otherwise, has hit yet another roadblock.

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