Can TAPI pipeline reinvigorate India-Pakistan relations

Can TAPI pipeline reinvigorate India-Pakistan relations

After almost over a year of groundbreaking of the TAPI project in December 2015, a long-awaited work on 1,680-km Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline got under way on March 3, 2017 in Pakistan. The inaugural ceremony of the Front and Engineering Design (FEED) was held to start work on the project in Pakistan. German firm ILF Consulting Engineers will conduct a route survey. The FEED process was launched in Afghanistan a week before its initiation in Pakistan. The construction of Turkmen section of the TAPI gas pipeline started in December 2015, which is running on schedule.

TAPI will carry 90 million metric standard cubic meter per day (MMSCMD) of natural gas from the 16 trillion cubic feet (tcf) Galkynysh field (formerly South Yolotan-Osman) for 30 years, with India, Pakistan, and Afghanistan originally set to have received 38, 38, and 14 MMSCMD, respectively. Afghanistan, however, has reduced its requirement to just 1.5-4 MMSCMD, which results in an increase in shares of India and Pakistan’s to as much as 44.25 MMSCMD each. Pipeline will transport gas from Turkmenistan’s Galkynysh fields to Fazilka in India, via, Herat and Kandahar in Afghanistan and Quetta and Multan in Pakistan.

However, the $10 billion (bn) TAPI gas pipeline, which was schedule to be operation in 2019 is been delayed and is expected to be completed in around four years, spanning in two phases, to be completed in 2021, as noted by acting mines minister of Afghanistan, Ghezal Habibyar.

Of the $10 bn cost of TAPI pipeline, Turkmengas Company, a consortium leader, is to contribute up to 85% of equity, while Afghan Gas Enterprise, Gail Limited and Interstate Gas Systems would contribute 5% each equity share in TAPI Pipeline Co. Ltd. On April 7, 2016, its shareholders signed an investment agreement and agreed an investment of over $200 million amongst them.

However, despite the initial progress of the TAPI pipeline project in Pakistan and Afghanistan, its successful operation and sustainability lies on evolving relations between India and Pakistan. Recently, Asian Development Bank (ADB) has rated TAPI project ‘doable’ through Afghanistan but its benefits of regional economic integration would depend on how India and Pakistan perceive this project. Both the countries would do well to offer synergy in the project rather than moving ahead in isolation. This approach can help them to bridge their trust deficit and reinvigorate their relationship.

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Several factors in the past has supported the progress of TAPI project. Firstly, sufficient availability of gas in Turkmenistan has allowed this country to offer gas to the market beyond China. Secondly, both Pakistan and Afghanistan have off late shown interests in diffusing security threats from Afghanistan Taliban, though not in a coordinated way. Thirdly, economics of gas pipelines, including TAPI, over the liquefied natural gas (LNG) always offer a cheaper option in a long-term period, particularly, during high LNG prices. Onland pipeline is always cheaper to gas supply through LNG route due to no liquefaction or regasification cost, which saves around $4/million British thermal units (mBtu).

However, in addition to above, recent developments across the region be it political or regional, has now offered both India and Pakistan to reset their ties, while coordinating each other for successful implementation of the TAPI project.

The foremost factors being the stand taken by Pakistan against Hafiz Saeed under pressure from the U.S., which has now introduced a bill to declare Pakistan a state-sponsor or terror and increasing voices within Pakistan to act against terror after several suicide attacks in their country. Pakistan visibly seems to take decisive action against homegrown terror outfits.

Secondly, Pakistan would ill afford to delay the TAPI project at a time when it is failing to match its growing LNG imports with rising gas demand. It would need early implementation of the TAPI pipeline project, which could offer this country to tackle such demand, effectively. Notably, Pakistan’s recent LNG deal with Qatar for 15 years can only meet 20% of Pakistan’s energy demand. Given the robust projected growth of their energy demand, India and Pakistan should prioritize their energy goals in a way that they can arrest any further delay in TAPI project. In this regard, their first step can be to reshape the Afghan peace process by engaging Afghanistan Taliban in consultation with Afghanistan government and not otherwise.

Thirdly, Bhartiya Janta Party’s (BJP) resounding victory in Uttar Pradesh (UP) elections with three-fourths majority can be an enabler in shaping Modi government’s diplomacy to reach out to the Pakistan’s leadership. These results have hinted towards more stable India and could act as an assurance for its neighboring country, including Pakistan, to look towards Modi’s government more positively.

Signals of reciprocation are also visible from Pakistan, which hints for normalization of relationship with India, particularly after the arrest of Hafiz Sayeed. Pakistan’s Defence Minister Khawaja Asif in his address to international security conference in Munich has stated that Hafiz Saeed can be a serious threat to Pakistan. There are similar such growing voices from Pakistan to act against terror.

One may argue that such pressure would not deter Pakistan to change its policy towards sponsoring terror, the ramification of the bill to declare Pakistan a terror state, if passed cannot be ignored. This could bleed Pakistan economically and reverse most of its economic gains it managed, with the support of China, including the most promising one of that for China-Pakistan Economic Corridor (CPEC). The last thing China wants this to happen as it pushes forward with CPEC is an India-Pakistan relationship on tenterhooks.

Nevertheless, positively, given the potential of the region, which connects Central Asia with South Asia, both India and Pakistan will do well to support TAPI project keeping larger benefit accruing to the region. For instance, India and Pakistan are set to join Shanghai Cooperation Organisation and are gearing up to develop their respective ports.

TAPI project could therefore, just provide an opportunity to end of their recently developed hostile relationship and help them to envisage larger benefits of cooperation and realizing the cost of non-cooperation.

This however, does not deter India to continue with its efforts to seal India-Pakistan border using smart technologies expected to be finished by 2018, concurrently, to deal with terror network emanating from Pakistan.

Thus, current evolving geopolitics offers scope for India and Pakistan to mend their ties, wherein shared goals and benefits provided by TAPI project can help them to reinvigorate their relations.

* Manish Vaid is a Junior Fellow with Observer Research Foundation having research interests in energy policy and geopolitics.

Disclaimer: The views expressed in the article are that of the author.

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