Turkmenistan-Afghanistan-Pakistan-India Pipeline | 12 Sep 2024

Source: TH

Why in News? 

Afghanistan is set to begin work on the long-awaited Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline, a landmark USD 10 billion project that promises to enhance regional energy connectivity and drive economic development.

• This development comes after years of delays primarily due to security concerns in Afghanistan.

What is the TAPI Pipeline?

• About: The TAPI pipeline is a major infrastructure project designed to transport natural gas from the Galkynysh gas field in Turkmenistan through Afghanistan, Pakistan, and India.
  • The pipeline will span approximately 1,814-kilometres and is expected to deliver around 33 billion cubic metres (BCM) of natural gas annually.
  • It will supply gas to Afghanistan (5%), Pakistan (47.5%), and India (47.5%) during its 30-year operational period.
  • The pipeline is also known as the ‘Peace Pipeline’ due to its potential to foster regional cooperation and stability. 
  • The project’s origins trace back to the 1990s, with significant progress made in 2003, supported by the Asian Development Bank (ADB). India joined the initiative in 2008, marking a major milestone in its development.
  • The TAPI Pipeline Company Limited (TPCL), is responsible for the construction and operation of the pipeline. The company is a joint venture of Turkmenistan, Afghanistan, Pakistan, and India, each holding shares in the project.
• Significance: 
  • Environmental Impact: The pipeline offers a crucial alternative to coal, reducing carbon dioxide emissions compared to coal-fired energy. 
    • For India, which relies heavily on coal, TAPI could facilitate a transition to cleaner energy sources and help meet its ambitious emission reduction goals(Net-Zero Emissions Target).
    • TAPI pipeline has the potential to alleviate air pollution issues in major cities like  Delhi, Mumbai, Karachi, and Islamabad by providing a cleaner energy alternative.
• Economic Benefits: Beyond energy supply, the pipeline offers opportunities for economic growth in Afghanistan and Pakistan through transit fees and job creation. It could also spur investment in renewable energy sources in these countries.
• Strategic Influence: TAPI is a key element in the broader geopolitical competition for influence in Central Asia. The US sees the pipeline as a strategic counter to the Iran-Pakistan-India (IPI) pipeline, which is supported by Iran and Russia. 
  • For Turkmenistan, TAPI represents a chance to diversify its export markets and reduce dependency on existing routes to China and Russia.
  • China’s investment in the CPEC highlights the competitive nature of energy infrastructure projects in the region. TAPI could serve as a counterweight to Chinese influence, particularly in Pakistan.
  • The pipeline enhances cooperation among Central and South Asian countries, potentially fostering collaborations in energy, communication, and transportation.
  • For India the pipeline positions Turkmenistan as a crucial energy partner, enhancing India's connectivity with Central Asia. It aligns with India’s broader strategy of improving regional connectivity and energy security.

What are the Challenges Regarding the TAPI Pipeline?

• Security Concerns: Most of the pipeline will traverse Afghanistan, a region known for its challenges like political instability, and humanitarian crisis. Ensuring the smooth implementation of the project has been a recurring issue.
• Financing and Administration: Securing adequate funding remains a major hurdle. The Asian Development Fund is expected to contribute a small portion, with the rest to be sourced from private investors. 
  • Additionally, the administration of the pipeline is complicated by the involvement of four separate pipeline companies, one for each participating country.
• Investment Climate: Turkmenistan's closed economy and limited integration into the global market pose significant obstacles to attracting investment. Corruption and governance issues further complicate the investment landscape.
• India’s Conflicts with Pakistan: India’s own conflicts with Pakistan raise questions about its long-term commitment to the TAPI pipeline. Political tensions between the two countries could hinder cooperation and smooth operation of the project.
• Environmental Concerns: While natural gas is cleaner than coal (natural gas emits 50 to 60% less CO2 than coal burned in a comparable plant), it is not without environmental issues. 
  • The extraction and transportation of natural gas involve risks such as water and soil pollution, and the potential for earthquakes from fracking.

Way Forward

• Explore alternative funding sources beyond the Asian Development Fund, such as private sector investment, international financial institutions, and government grants.
  • Provide tax breaks, subsidies, and other incentives to attract foreign investment. Clear and stable regulatory frameworks will also boost investor confidence.
• Promote industrial development along the pipeline route to create jobs, generate economic activity, and diversify regional economies.
• Strengthen regional security cooperation to address common issues and ensure the safety of the pipeline. Establish a central coordinating body to oversee the project, ensuring streamlined decision-making and efficient management. 
  • Foster positive relationships with local communities along the pipeline route to gain their support and minimise security risks.
• Implement best practices for natural gas extraction and transportation to minimise environmental impact and prevent pollution.