12-September-2024-Editorial

TAPI PIPELINE: BOOSTING REGIONAL CONNECTIVITY AND ECONOMIC DEVELOPMENT

Afghanistan is set to begin construction on the long-awaited Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline, a landmark project valued at USD 10 billion.

This initiative aims to enhance energy connectivity across the region and drive economic progress.

About TAPI Pipeline

• Introduction: The TAPI pipeline is a strategic infrastructure project designed to transport natural gas from Turkmenistan’s Galkynysh gas field through Afghanistan, Pakistan, and into India.
• Length and Capacity: Spanning about 1,814 kilometers, the pipeline is expected to transport around 33 billion cubic meters (BCM) of natural gas annually.
• Distribution: The gas will be supplied to Afghanistan (5%), while Pakistan and India will each receive 47.5% over its 30-year operational period.
• Peace Pipeline: Often referred to as the “Peace Pipeline,” it holds the potential to promote regional cooperation and stability.
• History: The project traces its origins back to the 1990s, with notable progress in 2003, supported by the Asian Development Bank (ADB). India officially joined the initiative in 2008.
• Management: The TAPI Pipeline Company Limited (TPCL), a joint venture between Turkmenistan, Afghanistan, Pakistan, and India, will oversee the pipeline’s construction and operation.

Significance

• Environmental Impact: The TAPI pipeline offers a cleaner alternative to coal, helping to reduce carbon dioxide emissions. For India, which depends heavily on coal, this project supports the transition to cleaner energy sources and its Net-Zero Emissions target.

• Cleaner Energy: The pipeline could help mitigate air pollution in cities like Delhi, Mumbai, Karachi, and Islamabad by providing natural gas as a cleaner energy source.
• Economic Benefits: The pipeline can generate economic growth in Afghanistan and Pakistan through transit fees and job creation. It may also attract investment in renewable energy.
• Strategic Importance: TAPI plays a key role in the broader geopolitical competition for influence in Central Asia. The US views it as a counter to the Iran-Pakistan-India (IPI) pipeline, supported by Iran and Russia.
• Diversification for Turkmenistan: For Turkmenistan, TAPI offers an opportunity to diversify its gas export markets and reduce dependency on China and Russia.

Challenges

• Security Issues: The pipeline will pass through Afghanistan, a region grappling with political instability, conflicts, and humanitarian crises. Ensuring smooth project implementation remains a challenge.

• Financing and Management: Funding remains a significant hurdle, with the Asian Development Fund covering only a small portion. The rest must be sourced from private investors, complicating financial management. Additionally, administering the pipeline across four countries adds further complexity.
• Investment Barriers: Turkmenistan’s closed economy and lack of global market integration make it difficult to attract investment. Corruption and governance challenges also pose risks to potential investors.
• India-Pakistan Relations: The strained relationship between India and Pakistan raises concerns about India’s long-term commitment to the project. Ongoing political tensions could disrupt smooth operations.
• Environmental Concerns: While natural gas is cleaner than coal, there are still environmental risks involved in its extraction and transportation, such as pollution and the potential for seismic activity due to fracking.

Way Forward

• Diversified Funding: Explore alternative funding sources like private sector investments, international financial institutions, and government grants beyond the Asian Development Fund.

• Investment Incentives: Offer tax breaks, subsidies, and other incentives to attract foreign investors. A clear and stable regulatory framework is essential to boost investor confidence.
• Industrial Growth: Promote industrial development along the pipeline route to generate employment and stimulate regional economies.
• Enhanced Security Cooperation: Strengthen regional security cooperation to ensure the safety of the pipeline. A central coordinating body could streamline decision-making and project management.
• Community Engagement: Build positive relationships with local communities along the pipeline route to gain their support and reduce security risks.
• Environmental Best Practices: Implement global best practices in natural gas extraction and transportation to minimize environmental impact and prevent pollution.

Conclusion

The TAPI pipeline is a landmark project that promises to enhance regional energy security, promote economic growth, and improve geopolitical cooperation.

However, addressing security, financing, and environmental concerns will be crucial for its successful implementation.