TAPI Pipeline Project
Also known as Trans-Afghanistan Pipeline, the TAPI Pipeline project is one of the biggest gas transit project in the region, and with its implementation, Afghanistan will become an important economic hub. Additionally, TAPI is one of the most lucrative projects for Afghanistan.
The initial discussion of natural gas transmission from Turkmenistan to Afghanistan and Pakistan dates back to 1990s, however, it was expedited only in 2003 with the support of Asian Development Bank (ADB). India joined the project in 2008. The aim behind the TAPI project is to export around 33 billion cubic meters (BCM) of natural gas annually through 1,814kilometer (km) of the pipeline from Turkmenistan to Afghanistan, Pakistan and India.
Stationed in Dubai, TAPI Pipeline Company Limited (TPCL) was incorporated on 11 Nov 2014 by member countries to build, own and operate the project. Turkmen-Gas, Afghan Gas Enterprise, Inter-State Gas System private limited and GAIL of India owns its shares.
The implementation of the project will be in two phases; Pre-FID (Final Investment Decision) and Post-FID phases. In the Pre-FID phase, the project enfolds four areas; Legal Framework, Finance/Funding, Surveys, and Land Acquisition. The pipeline construction begins in the post-FID phase.
The government of Afghanistan has signed several key agreements that encompass Inter-Governmental Agreement, TAPI Legal Framework Agreement, Shareholders Agreement, Gas Sale and Purchase Agreement, Investment Agreement, Operational Agreement, and Heads Agreement, without which the initial steps towards implementation of the project was inconceivable. Meanwhile, Heads of Terms for the Host Government Agreement and the Host Government Agreement are about to be signed. Other key agreements such as Gas Transportation Agreement, Gas Pipeline System Rules in the pipeline, Security Protocol, Land Services Agreement and Land Rights agreement are to be finalized soon.
Technically, the project required numerous studies and surveys that Afghanistan has completed; such as Land Acquisition, Rout, LIDAR (bathymetrical, topographical), ESIA, and Technical and Non-Technical Unexploded Ordinance surveys. On the other hand, concerning financial provisions, Afghanistan on their end has taken crucial steps to enable the development of the TAPI project.
As stated earlier the project has its advantages for Afghanistan and we observe it from two dimensions, the external or regional, and the internal.
In the external context, the TAPI pipeline project enhances cooperation among the central and south Asian countries. The project will open the corridor for potential cooperation on energy, communication, and transportation, that will ensure economic, political, and diplomatic advantages for Afghanistan. Globally, Afghanistan’s reputation is associated with war and terrorism that has overshadowed its economic importance in the region, however, with the implementation of TAPI Project, Afghanistan’s economic significance will rehabilitate that will be followed by peace and stability internally.
In the internal dimension, TAPI Project plays a significant role in developing the economy of Afghanistan by generating multi-million-dollar revenue, providing direct and indirect employment opportunities, infrastructure development, and energy production. Annually, the TAPI project will add approximately US$400 Million to Afghanistan’s revenue, and it will create thousands of direct and indirect employment opportunities for Afghans.
Afghanistan will get 500 Million cubic meters of gas in the first decade, that will increase to 1 billion cubic meters in the second decade and 1.5 billion cubic meters in the 3rd decade. Besides power generation for industries from gas, in the long run, Afghanistan has the vision of providing gas for households in the central and southern provinces and potential capability to produce fertilizers as Afghanistan has an agriculture-based economy.
People’s call for the implementation of the project is as a result of the mentioned benefits. The Afghan government is committed to taking all the necessary steps towards the implementation of the project that is foreseeable.