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FEB 09 2015

TAPI project: Why Dharmendra Pradhan's Pakistan visit will end up as mere talk shop

  • Economic Times, ET Bureau / Hyderabad
  • Created: Mon 09th FEB 2015

Union Petroleum and Natural Gas Minister Dharmendra Pradhan will be in Pakistan two days later to participate in a steering committee meeting of a trans-Afghanistan multilateral energy project called TAPI (Turkmenistan, Afghanistan, Pakistan and India) pipeline - a visit that would merely be a photo-op at its best and a waste of time and effort at its worst.

TAPI pipeline remains a pipe dream for two decades since the project was first initiated on 15 March 1995 when Turkmenistan and Pakistan had signed a memorandum of understanding for the project. Afghanistan, under the then Taliban government, joined the proposed project in January 1998 and India came into the frame in 2008 when on 24 April that year India, along with Pakistan and Afghanistan, signed a framework agreement to buy natural gas from Turkmenistan.

Pradhan's Pakistan visit on 10 February comes at a time when political relations between New Delhi and Islamabad continue to remain in a limbo. It is anybody's guess how the Islamabad visit of the Indian minister would pan out when contentious issues remain unresolved not only between India and Pakistan but also between India and Afghanistan on the question of royalty for transit rights.

The four partner countries have made some progress, albeit at a glacial pace, on the $10 billion nearly 1,800-km-long proposed pipeline project that aims to export up to 33 billion cubic meters (bcm) of natural gas per year and integrate economies of the four partnering nations.

However their ambition of starting construction later this year and completing the project by 2017 cannot be realized unless all partnering countries show political determination at the highest level and the United States is benignly disposed.

For example, the Afghan parliament approved the pipeline project on 16 May 2012 and the very next day the then Indian government of Manmohan Singh allowed state-run Gas Authority of India Limited (GAIL) to sign the Gas Sale and Purchase Agreement (GSPA) with TrkmenGaz, Turkmenistan's national oil company.

Yet, the biggest roadblock is that the TAPI project is still stuck for want of a credible operator.

An experienced international company is needed to head a consortium of national oil companies of the four nations in the TAPI project but little concrete progress has been made in this regard after the French giant Total SA lost interest in the project as Turkmenistan refused to accept its condition of a stake in the gas field that will feed the pipeline. The four partner countries' state-owned firms neither have the financial heft nor the requisite experience of running a transnational pipeline.

Oil ministers of the four countries had met at the last steering committee meeting of the TAPI project in Ashgabat (Turkmenistan) on 20 November 2014 and set themselves a three-month deadline to resolve all pending issues so that work on the ambitious project can start by 2015.

An official statement released after the 19th meeting TAPI steering committee said thus: "It was decided that the next meeting of the Steering Committee will be held in February 2015 in Islamabad. It was also agreed that remaining issues will be addressed before the meetingAll sides agreed that steps will be taken to start the project by 2015."

Asian Development Bank (ADB) is the transaction advisor to facilitate the proposed TAPI pipeline which would start from Turkmenistan's Dauletabad gas field and end at Fazilka, Punjab in India after passing through Herat and Kandahar (Afghanistan) and Quetta and Multan (Pakistan).

The big picture in this context is that a mega transnational project involving as many as four countries can succeed only when political relations among the partnering nations are at their best. This is barely so with regard to India and Pakistan and in fact ties between the two nuclear armed neighbours have touched a new low since the onset of new government in India despite a solid start in the first few weeks of Prime Minister Narendra Modi taking over the reins of the country on 26 May last.

The question is: can India and Pakistan work together on a major energy project when their troops have lately been involved in bloody ceasefire violations at International Border and Line of Control for months, worst since the Kargil War of 1999?

PM Modi exhorted top Indian diplomats at the heads of mission conference in New Delhi on 7 February to think fresh, shed old mindsets and position India globally in a leading role and not just be a "balancing force". But the fact is that in the past eight and a half months, the Modi government has continued with the foreign policy of the previous UPA government and not come up with any bold and out-of-the-box ideas while dealing with near abroad or far abroad.

One would like to know what concrete steps were taken by the Modi government in ironing out the well known wrinkles with both Pakistan and Afghanistan on the TAPI project before sending Dharmendra Pradhan to Islamabad.

Tags

Delhi Punjab TOTAL Bombay Electricity Supply and Transport Gas Natural Gas Oil Pakistan Energy Memorandum Of Understanding Gas Field United States Petroleum Asian Development Bank India

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