2020-01-18 › Time for a TAPI Update
What is the state of work on the 1,800-kilometer pipeline as the decade comes to a close?
In February 2018, Turkmen President Gurbanguly Berdimuhamedov joined his Afghan counterpart Ashraf Ghani in Herat to herald the beginning of work on the Afghan portion of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline. Berdimuhamedov and Ghani posed for photos of a four-way handshake with then-Pakistani Prime Minister Shahid Khaqan Abbasi and then-Indian Minister of State for External Affairs M.J. Akbar.
There were smiles all around as the nearly 1,800-kilometer pipeline, with a billion pricetag, reportedly entered its most difficult hurdle: An Afghanistan still at war. The Turkmen portion, government officials said at the time, had been completed.
Fast forward to December 2019: Italian energy consultant RINA announced on December 4 that it had been contracted by Turkmengaz, the state energy company, to serve “as its technical consultant for supervision and project support services relating to the Turkmen section of the TAPI gas pipeline.” The million contract, RINA said in a press release, “covers technical advice and support services for the construction of a 214 km of pipeline across Turkmenistan along with two compressor stations.” Work will be carried out in two phases over four years.
Such an announcement heavily suggests not only that work has not been completed on the Turkmen portion, but combined with other reports hints that work may have never begun. Even earlier in 2019, in April, a Russian website reported that the Chelyabinsk Pipe Rolling Plant, headquartered in Moscow, had won a tender to supply 214 kilometers of pipe for the TAPI pipeline – the exact length of the Turkmen section.
Ashgabat claimed in December 2015 to have finally broken ground on the pipeline, after years of negotiating with its partner countries and sorting out financing. The financing remains a bit murky, and with Turkmenistan leading the consortium that’s no surprise. Turkmenistan’s stake has grown from a reported 51 percent in 2015 to 85 percent as of 2018, with the other three partners holding 5 percent stakes. Turkmenistan has promised repeatedly to front most of the costs of the pipeline.
Western firms withdrew interest on the grounds that Ashgabat would not allow them an equity stake in the project. In 2015, Turkmenistan was in talks with Dubai-based oil and gas company Dragon Oil, which already works in the country’s Caspian fields, but it’s unclear what happened to that negotiation. In 2016, the Saudi Arabia-based Islamic Development Bank (IDB) signed an agreement to loan Turkmenistan 0 million for TAPI; by 2018, that figure grew to jumi billion.
In 2012, the Asian Development Bank (ADB) produced a technical assistance report regarding TAPI. The ADB, the report noted, had served as TAPI’s secretariat since 2002, “facilitating and balancing the interests of the parties.” At the time, the ADB allocated a jumi.5 million grant to finance road shows to attract investors and finalize consortium agreements. In March 2018, the ADB released a report marking the completion of its technical assistance project. While it judged itself successful, the report’s “major lessons” are worth quoting in full:
The Project cost was estimated by ADB in 2008 at .6 billion, more than three times the 2002 estimate at [add/news/200118-the.htm].6 billion. Persistent delays and changes in technical designs have raised TAPI's projected cost. While there have been signs of Project progress recently, it coincided with the emergence of alternative gas producers that may compete with Turkmenistan and a declining trend in energy demand globally. Hence, it can be inferred that time is of the essence in any energy development project on which validity of initial assumptions should be continuously updated from which project feasibility should be assessed.
The estimated costs of the project have ballooned, with most media citing billion as the final, all-inclusive, figure. The announced deadlines for completion – for example, an optimistic 2018 stated by officials in 2015 – have passed by. Recent reports in Pakistani media cite 2022 for the flows of gas to begin.
At an October 26 cabinet meeting, Berdimuhamedov, as Eurasianet reported it, “droned in generalities about the importance of the Turkmenistan-Afghanistan-Pakistan-India route, describing it once more as a force for regional peace and economic prosperity.”
He then ended by “delivering a severe reprimand to his deputy Prime Minister with the portfolio for the oil and gas sector, Myratgeldi Meredov.”
Elsewhere on the route, there are hints of additional trouble and signs of delay as well. Also in October 2019, Afghan media outlet
Pajhwok reported that land acquisition had formally begun in Herat, more than a year after the celebrated launch of work. The Afghans also claimed to have shortened the route and thus lowered the estimated cost by a billion or two. Afghan media also reported that the ADB has “evinced an interest” in providing jumi billion for the project, though no statements on the ADB website support that claim.
In August 2019, Pakistan said groundbreaking on its portion of the pipeline would occur in October, but October came and went. In November, Pakistani’s
The Nation reported that instead of breaking ground on the pipeline, Islamabad was in the process of first renegotiating gas prices with the TAPI Project Company, i.e. Turkmenistan.
Officials in all four TAPI countries, though Turkmenistan and Pakistan have been the loudest, have repeated the same platitudes for years: Progress, progress, progress. Nevertheless, if the trickle of news from 2019 suggests anything, it’s that very little work has been completed, all the talking, handshakes, and celebrations aside. Turkmen officials must either believe in the power of positive thinking or the theory of the Big Lie — the notion that a big enough lie, repeated often enough, becomes the truth. Wonder if that works for infrastructure projects?
- Catherine Putz is Managing Editor of The Diplomat.
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