Turkmenistan, Afghanistan, Pakistan, India Natural Gas Pipeline (TAPI)
Once completed, the estimated 1,814 kilometers TAPI Natural Gas Pipeline, or “Peace Pipeline”, is expected to export, over three decades, up to 33 billion cubic meters of natural gas per year from Turkmenistan to Afghanistan, Pakistan and India. An independent study of TAPI calculated an Economic Internal Rate of Return of 16.8 percent for the project, the generation of thousands of construction, operation, and maintenance jobs, and the estimated annual revenue for the Afghan treasury is around USD $400 million. After preliminary discussions beginning in the 1990s, the Asian Development Bank managed feasibility studies in 2005 and 2008 and, in 2013, it started serving as the TAPI project Secretariat and Transaction Advisor. On 13 December 2015, the President of Turkmenistan, H.E. Gurbanguly Berdimuhamedov, the President of Afghanistan, H.E. Ashraf Ghani, the Prime Minister of Pakistan, H.E. Nawaz Sharif, and the Vice-President of India, H.E. Hamid Ansari signed a Memorandum on Energy at a groundbreaking ceremony in Mary, Turkmenistan (near Galkynysh Gas Field) to commemorate the start of the pipeline’s construction, to be completed by 2020. In addition, State Concern TurkmenGaz (with an 85% share), Afghan Gas Enterprise, Inter State Gas Systems (Pakistan), and GAIL (India), signed the project’s Shareholders Agreement.
Current Status
During the past twelve months, the Ministry of Mines and Petroleum had worked toward completing a number of new agreements with the project’s other three partner countries, including a Pipeline System Rules Agreement, a Host Government Agreement, and a Transportation Agreement (each to then be subsequently discussed with the TAPI Pipeline Company Limited, “TPCL”). In addition, the Ministry held numerous technical working group meetings with TPCL to discuss the project financing and finalize the financial advisory service agreement between TPCL and the Asian Development Bank and discuss the project design, engineering and the project implementation phases. Furthermore, the Ministry hosted the Front End Engineering and Design works inauguration of the project and is currently facilitating design and survey work in Afghanistan (following the contract signing, on 17 January 2017, between TPCL and ILF Beratender Ingenieure GmbH and held numerous visits and conferences to enhance public communities support for the TAPI project. In addition, the project’s Investment Agreement has been signed, outlining its two-phase implementation: (i) Pre-Final Investment Decision; and (ii) Final Investment Decision, led by the TPCL (now established in Dubai). As per the Investment Agreement, Afghanistan has paid its first installment of shares; where the share certificate is issued to the Afghan Gas Enterprise. A Detailed Route Survey package has also been finalized by the consortium, with 14 tenders made in response to 108 RFPs, whereas soon the Detailed Route Survey, Design and Engineering of TAPI Project will be completed in Afghanistan. TAPI is an integral part of the Government of Afghanistan’s National Infrastructure Plan.
| Budget & Funding Status | USD $7.5 billion for the pipeline and $15 billion for the gas field |
| Institutional Partners | TAPI Pipeline Company, Ltd. (TurkmenGaz, Afghan Gas Enterprise, Inter State Gas Systems, and GAIL), Turkmenistan, Afghanistan, Pakistan, India, Japan, the Asian Development Bank, and a consortium of Japanese and Chinese companies |
Recommended Actions by RECCA-VII and Beyond:
- Signing of the Pipeline System Rules Agreement, a Host Government Agreement, and a Transportation
- Agreement. Commencement of construction work on the TAPI pipeline (to be completed by 2020).
- Support the TPCL in convening more steering committee site visits to accelerate pipeline construction and more investment road shows around the world to raise additional funds.