TAPI Full Form

What is the full form of TAPI?

The Turkmenistan-Afghanistan-Pakistan-India Pipeline (TAPI) is a natural gas pipeline being developed that is proposed to run across four countries - Turkmenistan, Afghanistan, Pakistan, and India. TAPI is also called the Trans-Afghanistan Pipeline or the Peace Pipeline. The purpose of building this pipeline is to transport natural gas from the Galkynysh Gas Field located in Turkmenistan, through Afghanistan, into Pakistan and India. The project holds both economic and political significance for the four countries involved. Read ahead to know about TAPI in detail.

Overview of TAPI

TAPI stands for Turkmenistan-Afghanistan-Pakistan-India Pipeline and the abbreviation is formed from the first letters of the four countries that are involved in the project - Turkmenistan (T), Afghanistan (A), Pakistan (P), and India (I). TAPI is proposed to be a 1,814km trans-country natural gas pipeline and is expected to initially transport 27 billion cubic meters (bcm) of natural gas in its first year. This amount is expected to rise to 33 billion cubic meters (bcm) of natural gas per year after one year of the pipeline’s operation.

The TAPI pipeline starts at Galkynysh Gas Field, which is the world's second-largest gas field, located in the Mary region in Turkmenistan. From there the TAPI pipeline will travel 214 kilometers to reach Afghanistan. The section of the TAPI pipeline in Afghanistan will run through the Khandhar region and along the Herat highway of Afghanistan for a total distance of 774 kilometers. It will then enter Pakistan where it will cover 826 kilometers and run across Quetta and Multan cities. Finally, the TAPI pipeline will enter India and end at Fazilka city in Punjab, India.

Background of TAPI development

The TAPI pipeline project was first planned in the 1990s in a bid for Turkmenistan to generate revenue through exporting natural gas to Afghanistan, Pakistan, and India from its rich natural gas reserves.

This plan started to come to fruition on March 15, 1995, when the governments of Turkmenistan and Pakistan signed a memorandum of understanding about the TAPI pipeline. Following this, the Central Asia Gas Pipeline Limited consortium, also called CentGas was formed in August 1996 in Turkmenistan for the purpose of constructing this pipeline. The consortium consisted of many international oil companies, including Unocal Corporation, Delta Oil Company (Saudi Arabia), Gazprom (Russia), Turkmenrusgas of the Government of Turkmenistan, and more. The consortium was incorporated through formal signing ceremonies held in August 1996.

In December 2002, the governments of Turkmenistan, Afghanistan, and Pakistan signed a new deal to become involved in the TAPI pipeline project. In 2008, India, Pakistan, and Afghanistan came to an agreement to buy natural gas from Turkmenistan and the four heads of the countries signed an inter-government agreement in 2010 for the same. Align with this, the petroleum ministries of the four countries also signed a Gas Pipeline Framework Agreement (GPFA) in December 2010.

There was some delay in India and Afghanistan coming to an agreement about transit fees for the natural gas passing through Afghanistan, as well as India and Pakistan coming to an agreement about the transit fee for the pipe passing through Pakistan. Finally, in 2012, the parties involved signed a bilateral gas sale agreement.

In 2013, Turkmengaz from Turkmenistan, Afghan Gas Enterprise from Afghanistan, Inter State Gas Systems from Pakistan, and Gas Authority of India Limited (GAIL) from India, were nominated by their respective countries as shareholders who would be responsible for investing and promoting the TAPI pipeline project. Pakistan's Interstate Gas Systems (ISGS) and Afghanistan's Afghan Gas Enterprise (AGE), each owned 5% of the project. GAIL of India acquired 5% of the company and Turkmenistan's Turkmengaz owned an 85% majority stake in TPCL.

The construction of the TAPI pipeline started in Turkmenistan on 13th December 2015 and by the first half of 2019, it was completed. In Afghanistan, the construction of the TAPI pipeline segment started on 24 February 2018. In Pakistan, construction started in October 2019. However, political instability in Afghanistan as well as tension in Indo-Pakistan ties have stalled the project since then.

Financing and Construction of TAPI

While initial cost estimates of the TAPI pipeline project were at $7.6 billion, a more recent estimate puts the cost at more than $10 billion.

The Asian Development Bank (ADB), which also serves as the development's transaction adviser, is providing financial support for the TAPI project. India, Pakistan, and Afghanistan signed an investment agreement with the Asian Development Bank in April 2016 and as part of that agreement, an initial budget of $200 million was set aside to fund one of the project's phases. Turkmenistan also requested a $700 million loan from the Islamic Development Bank in December 2016.

The TAPI pipeline project was planned to be constructed in two phases to the TAPI. In the first phase, a free-flow pipeline with two compressor stations in Turkmenistan and a delivery capacity of roughly 21 bcm per year was proposed to be built. In order to enhance supply capacity to roughly 33 bcm/year in the second phase, six compressor stations were going to be added in the Afghanistan and Pakistan regions.

Benefits of TAPI

The following are some of the anticipated benefits of the TAPI pipeline project:

• The pipeline is anticipated to promote unprecedented levels of trade and collaboration throughout Central Asia, as well as peace and security among the four countries of Turkmenistan, Afghanistan, Pakistan, and India.

• The project will provide long-term energy security at affordable prices for more than 1.5 billion people in India, Pakistan, and Afghanistan.

• Pakistan and Afghanistan will also receive a hefty transit fee for the pipeline.

• The project will create over 12,000 jobs

• The project will increase Turkmenistan's revenue from the sale of gas.

Current Status of TAPI

While initial construction was started with enthusiasm, the project is currently at a standstill. This is due to multiple reasons. One of the factors here is the forceful takeover of Agfasnishan by the Taliban. As the Indian government in New Delhi doesn’t recognize the Taliban regime officially, it becomes challenging to further negotiate talks. The political tension between India and Pakistan also adds to concerns for India. If the pipeline becomes operational, a large portion of India’s energy needs will be dependent on it. However, as the pipeline will run through Pakistan, they will have significant control over it and hence can use it as leverage in times of crisis. Moreover, there are questions about Turkmenistan’s ability to successfully develop a transnational project of this scope.

However, the situation remains dynamic. India has recently resumed its efforts to resurrect the long-stalled Turkmenistan Afghanistan Pakistan India (TAPI) pipeline. During a recent three-day state visit to Turkmenistan, Indian President Shri Ram Nath Kovind brought up the project and emphasized the significance of security along the TAPI pipeline.