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Energy Diplomacy

TAPI or IPI?: Second NABUCCO Disease?


Realization of Turkmenistan-Afghanistan-Pakistan-India (TAPI) Pipeline Project planned to transport Turkmen natural gas from Caspian sea through Afghanistan to Pakistan and then to India. Proponents of the project see it as a modern continuation of the Silk Road.

The original project started on 15 March 1995 and Memorandum of Understanding was signed between the governments of Turkmenistan and Pakistan for a pipeline project. In August 1996, the Central Asia Gas Pipeline Ltd. (CentGas) consortium for construction of a pipeline (led by Unocal) was established. Since the pipeline have to pass through Afghanistan, it was necessary to tackle with Taliban. On 7 August 1998, American embassies in Nairobi and Dar-es-Salaam were bombed under the direction of Osama bin Laden, and all pipeline negotiations halted. The new deal on the pipeline was signed on 27 December 2002 by the leaders of Turkmenistan, Afghanistan and Pakistan. Since U.S. ousted the Taliban from power, the project has been revived and got strong US support. Consequently, it will enable Turkmenistan to transport its gas to Asian markets without relying on Russian outdated routes.

On 24 April 2008, Pakistan, India and Afghanistan signed a Framework Agreement to buy natural gas from Turkmenistan. The Intergovernmental Agreement on the pipeline was signed on 11 December 2010 in Ashgabat. However, in April 2012, India and Afghanistan have failed to agree on transit fee for gas passing through Afghan territory. Consequently, Islamabad and New Delhi too could not agree on the transit fee for the segment of the pipeline passing through Pakistan. Afghanistan charges Pakistan for transportation of natural gas from its territory and Pakistan charges India for the same the reason.

However, transit fee is not only problem between parties. Significant problem is remaining Taliban factor in Afghanistan and Pakistan, including long-run disputes between India and Pakistan. The fact remains as death of Osama bin Laden could not suspend activities of Al-Qaeda, which might be potential threat for pipeline. Any explosion in pipeline by terrorist groups will cause serious suspensions and delays in energy provision of region. Although, this project will enable Afghanistan to develop its economy and social well-fare, recently Afghan Government declared its withdrawal from project. Since, U.S. withdrew is troops from Afghanistan, Government must seek new security patrols to provide safety of pipeline.

Lately, China also declared it eagerness to participate in both project (TAPI and IPI) and to extend pipeline till China. For China, it is not matter which project will be implemented, just it must serve to Chinese energy demand and interests. China factor in those projects make issues too much complicated for Russia. Because, Russia worry about Chinese penetration in Central Asian energy market, since China deemed to be one of the biggest energy market for Russia due to growing energy demand of China.

I am not so optimistic on the realization of both projects. First of all, realization of TAPI does not serve both to the geo-political and geo-economic interest of Russia. Because, in case of realization of TAPI, Russia will lose its reliable energy source and partner in Central Asia (including, in its interest area), since they have a 25-years agreement (2003-2028) on purchase of Turkmen natural gas. Because, Russia buys Turkmen gas on low market prices, but sells to Europe on high or its self-determined prices.

In this regard, Iran-Pakistan-India (IPI) Pipeline Project occurs as an alternative and rival to TAPI. Notwithstanding, Russia declare its open financial and political support for the implementation of IPI, there some invisible factors behind this support. Because, Russia plans to keep Iran away from European energy markets with the realization of IPI. However, taking into consideration US-led sanctions and protests because of its Nuclear Program, Iran has very less chance to realize this project as well. Because, U.S. claims that, revenues from this project will enable Iran to develop its nuclear program and enlarge nuclear arsenal. Knowing this, Russia continues to supply Iran with nuclear technologies to promote its nuclear program.

In this regard, Russia manages to keep Iran away both from IPI and European energy markets. Hence, Iran bypassed not only by U.S., as well as by its strategic ally – Russia. In this context, Iran will remain in the “support framework” of Russia. Official statements to support the IPI project are just a bunch of words. Thus, fortune of TAPI and IPI might coincidence with NABUCCO: “Projects on Papers”!

Ilgar Gurbanov

Expert on Russia, Caucasus and Energy Studies

Strategic Outlook Research Organization


You can find the original article at:  http://www.strategicoutlook.org/asia—pasific/news-tapi-or-ipi-second-nabucco-disease.html

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Discussion

One thought on “TAPI or IPI?: Second NABUCCO Disease?

  1. On February, 9th, 2012 the Minister of Energy of Russia Sergey Shmatko has carried on negotiations with the Minister for Foreign Affairs of Pakistan Hinoj Rabbani Har. The parties have expressed mutual interest in consideration of possibility of participation of the Russian companies in realization of large international infrastructural projects, in particular, in projects ТАПИ and CASA-1000. Considering the big hydropotential of Pakistan, participants of negotiations haven’ted prospects of participation of the Russian companies in studying of possibility of building of objects of hydrogeneration in Pakistan.

    Posted by Fuad | 15/05/2012, 01:05

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