Turkmenistan, being Afghanistan's neighbor to the north, now is said to have the world's second largest reserves of gas, making the country a global energy giant. It can be considered good news for an Afghanistan which desperately needs to grow its industries and economy. Having such global energy magnets as Turkmenistan and Iran as neighbors bodes well for Afghanistan's access to energy in the future given the fact that the coming decades will see ever greater rush for energy sources in our region and beyond.
The much publicized TAPI natural gas pipeline is slated to enter the construction phase in 2012. The pipeline is envisaged to transport Turkmenistan's gas across Afghanistan to Pakistan and onward to India.
It is planned to transit more than 30 billion cubic meters of gas every year with India and Pakistan as the major buyers for their industries while Afghanistan floating plans to build industries along the pipeline. Turkmenistan The pipeline agreement was signed in April 2008 and since then, the governments involved have not expressed any doubts about the feasibility of the project given the security concerns on Afghan and Pakistani territories.
The Ministry of Mines of government of Afghanistan is in assuring every body that the plans remain unchanged and the construction work will be completed by 2014, thus allowing for commercial operations to start some time in 2015.
The TAPI pipeline project, from the beginning, has been a very interesting idea - promoting inter-governmental linkages, contributing to regional economic development and allowing for more cooperation among the regional countries in matters of economy, trade, business and politics. The United States, having its own set of reasons, has thrown its full weight behind the project and has been encouraging the countries involved to go ahead with the agreements made.
There have been many outstanding issues concerning this pipeline project. the pricing of gas sold to Pakistan, India and Afghanistan has been a contentious issue with the buyer and seller sides insisting on their own pricing formulas. Turkmenistan is interested in a pricing model that links the price of the gas it sells to international oil prices. India and Pakistan, on the other hand, insist on a fixed rate pricing model that would keep them immune from the volatility of international energy prices. The pricing deliberations were supposed to be finalized by October 15, but the negotiations on the sensitive issue are still ongoing.
The TAPI pipeline has a serious competitor in the Iran-sponsored IP - Iran Pakistan - pipeline, which has also been named by Iran as the "peace" pipeline. It is planned to transport Iranian gas to Pakistan and from there to India and even Bangladesh as the Iranian president, Mahmood Ahmadinejad, once had hoped.
The "peace" pipeline is an attractive proposition for Pakistan. Therefore, Pakistan, already facing a severe energy crisis, is firmly interested in this project too despite American pressure to drop the idea of joining it.
The Late Richard Holbrooke, the American special representative for Afghanistan and Pakistan, on more than occasion had publicly voiced American opposition to Pakistan's plans for taking up the "peace" pipeline. The American regional policies towards Iran and its tacit strategy of preempting an Iran-Pakistan alliance in the region are surely in the work.
A pipeline that would directly transport Iranian energy to Pakistan would go a long way in strengthening long-term strategic ties between the two countries - an outcome that Americans are averse to see happening. With India dragging its feet on the proposed peace pipeline, Iran has been quick in roping in an energy-hungry China.
Reportedly, the Chinese are interested in the project. Whether China will eventually join the project or not would take many more years since the Iran and Pakistan sectors of the pipeline should first go successfully operational. Iran has already completed the 1100 kilometer part of the pipeline that will go through its territory. Pakistan has announced it will start construction works by early 2012.
The Iranian proposed "peace" pipeline is decidedly a practical idea and has a high feasibility levels for implementation and long-term maintenance. In comparison to TAPI, it faces much less security challenges as both Iranian and Pakistani Balochistan regions are relatively calm as against Afghanistan's Southern regions where the TAPI pipeline is planned to cross.
The security challenges facing the TAPI pipeline project might well render the project as unfeasible. The pipeline, although being buried underground, can not be completely immune from possible attacks of insurgent and other criminal groups of which Afghanistan has in abundance.
The works of construction and maintenance of the pipeline will be undertaken by foreign private companies. but still whether or not the government of Afghanistan can successfully manage the intricate and sensitive affairs concerning the pipeline is open to question. The weak, inefficient and corrupt administration might turn out incapable of taking care of such a massive project.
The potential for Afghanistan becoming a regional hub of energy transit is significant. There is such a potential and in this outcome, lies great benefit for Afghanistan in terms of opportunities to have sources of revenues and power a modern economy it needs to build.
The problem of insecurity and the ongoing war and insurgency inside Afghanistan is a significant challenge facing this crucial project. But it would still be up to the competence and efficiency of the government in Afghanistan to manage these security challenges and other issues in such a way that the project can go online and continue in operation.
The pipeline project, if eventually implemented and operationalised, can be a powerful trigger for the growth of small, medium and large scale industries in the Western half of Afghanistan where it is planned to cross. There are already more than 250 small and medium scale industries set up in Herat city. Relatively cheap gas in abundance will certainly encourage a growth of varied industries at least in those areas where the Afghan entrepreneurs are willing to invest and have access to other infrastructures.
In geopolitical terms, the TAPI can be a trigger for yet wider and larger changes in how the countries in our region view one another and the degree to which they are willing to cooperate with each other. If eventually gone online, it can be a long, decisive step towards the goal of stabilizing the region.