September 08, 2008
IPI & TAPI to change the economics of South Asia
Today’s Zaman reported that there are two important natural gas pipeline projects which, if realized, might change the politics and economics of South Asia. The first is the Iran Pakistan India and the second is the Turkmenistan Afghanistan Pakistan India project.
First proposed by Iran in 1994, the IPI has been bedeviled by delays, US opposition and most recently because of disagreements between India and Pakistan over transit fees and security concerns.
Work on the approximately 2,775 kilometer long pipeline will begin in 2009 and will be completed by December 2012.
It is expected to supply 60 million cubic meters a day from Iran's South Pars field to be shared equally by Pakistan and India. The route of the pipeline has been altered at the insistence of India for security reasons. It will enter Pakistan near Gwadar and move along the highway to join the transmission system near Nawabshah.
The original TAPI project started in 1995, when an inaugural memorandum of understanding between Turkmenistan and Pakistan for a pipeline project was signed. In 1996 the Central Asia Gas Pipeline Limited consortium for construction of a pipeline, led by American company Unocal was formed. On October 27th 1997, CentGas was incorporated in formal signing ceremonies in Ashgabat, by several international energy companies along with the government of Turkmenistan. In January 1998, the Taliban, selecting CentGas over a Brazilian competitor, signed an agreement that allowed the proposed project to proceed. In June 1998, Russian Gazprom withdrew from the project followed by Unocal on December 8th 1998, after which the project was shelved and forgotten for three years.
The 1,680 kilometer TAPI pipeline will run from the giant Turkmen Dauletabad gas field to Afghanistan. From there it will be constructed alongside the highway running from Herat to Kandahar, and then via Quetta and Multan in Pakistan. The final destination of the pipeline will be the Indian town of Fazilka, near the border between Pakistan and India. The pipeline will be 1,420mm in diameter with a working pressure of 100 atmospheres and a capacity of 33 billion cubic meters of gas annually. The cost of this long infrastructure is estimated at USD 6 to USD 7.5 billion.
