TAPI Pipeline to Remain Failure Without India and Pakistan’s Participation

Executive Summary:

• Turkmenistan is eager to accelerate the construction of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline to sell its natural resources to the energy-starved countries of Pakistan and India. 
• Due to regional conflicts and instability, the project has been stalled for over 30 years. With the Taliban government’s recent assurances toward the pipeline’s security, construction seems ready to start in earnest. 
• India, however, is concerned about the gas price and the pipeline’s path through Pakistan, causing uncertainty in the project’s completion. 

During a cabinet meeting on February 7, President of Turkmenistan Serdar Berdimuhamedov urged Turkmen officials to accelerate the construction of the $10 billion Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline. While highlighting Turkmenistan’s energy policy for 2025, Berdimuhamedov stressed the need to modernize the energy sector on a priority basis to enhance the country’s oil and gas production capacity. When emphasizing reliable gas supplies to domestic and international markets, he urged for fast-track construction of the much-delayed TAPI pipeline (Afghanistan International, February 8; News Central Asia, February 10).

The TAPI pipeline is a strategic energy transportation project, opening the Galkynysh gas field in Turkmenistan to the energy-starved markets of India and Pakistan (see EDM, June 6, 2023; News AZ, September 12, 2024). The TAPI pipeline is projected to transport 33 billion cubic meters (BCM) of natural gas each year from Turkmenistan’s gas field to the Indian city of Fazilka near the Pakistan border via Afghanistan and Pakistan through the construction of an approximately 1,800-kilometer (1,120-mile) long pipeline (Business Turkmenistan, August 23, 2022; Interfax, January 14). The preliminary cost of the pipeline is estimated at $10 billion (Interfax, January 14). The project was launched in 2018, but the construction work could not proceed due to security concerns in Afghanistan (Pakistan Today, January 18, 2022).

The state-owned Turkmengaz, a Turkmen energy company, has already completed a 214-kilometer (133-mile) section of the pipeline in Turkmenistan. In the TAPI project, Turkmengaz holds an 85 percent stake (Interfax, January 14). Afghanistan, India, and Pakistan hold the remaining stakes with 5 percent of shares each  (News AZ, September 12, 2024). In September 2024, Ashgabat and Kabul officially resumed work on the Afghanistan section of the TAPI gas pipeline project (Turkmen Portal, September 11, 2024).

In January, Mohammad Murad Amanov, the CEO of the TAPI pipeline project, during a meeting with the governor of Herat in Afghanistan, said, “The extension of the gas pipeline is advancing swiftly, with three kilometers [1.86 miles] already completed in Afghanistan” (Daryo, January 15). The project, however, has been delayed for over 30 years after first being considered by all four countries in the early 1990s. The worsening security situation, conflict, and internal fighting in Afghanistan severely slowed the pipeline’s progress (South Asian Voices, November 6, 2024). In 2022, the Taliban government provided security assurance to the participants involved in the project by dedicating 30,000 troops to the security of the pipeline traversing Afghanistan territory (Pakistan Today, January 18, 2022).

Another delay in the pipeline’s construction was Russia’s interest in the project. Before Russia’s full-scale invasion of Ukraine in February 2022, Moscow was taking a keen interest in the project given its relevance for relations with Central Asia and South Asia. The project has the potential to reshape the energy landscape of these two regions. As a potential player in TAPI pipeline construction, it is possible that Russia sought to use the pipeline to expand its influence in South Asia. While addressing an international conference in Tashkent in 2021, Russian Foreign Minister Sergei Lavrov said, “The integration of the energy infrastructure of Central and South Asia is very promising” (Business Turkmenistan, July 16, 2021).

India has already raised concerns about this pipeline project on different grounds. In 2018, India objected to the price of natural gas and sought renegotiation (Economic Times India Times, August 22, 2018). India contended that the 2013 gas sale purchase agreement benchmarked the price of exported Turkmen gas at 55 percent of the prevailing crude oil price (Economic Times India Times, August 22, 2018). Moreover, transit fees and transportation charges would further increase the price of gas imported to India through the TAPI pipeline to over $10.5 per British thermal unit (mmBtu), which at the time was more than double the average rate of natural gas prices in India (Economic Times India Times, August 22, 2018).

India also expressed dissatisfaction with the logistical and security challenges the project could face in constructing the pipeline through volatile areas in Afghanistan and Pakistan (South Asian Voices, November 6, 2024). New Delhi is also worried about becoming dependent on its arch-rival Pakistan for its gas supply. India considers that the pipeline would grant Pakistan leverage in the case of a future bilateral conflict, allowing Pakistan to potentially halt India’s gas supply (Economic Times India Times, September 17, 2024).

New Delhi has not completely withdrawn from the project but has not firmly committed to joining it. India’s concerns make its participation in the TAPI pipeline uncertain, and due to this response, Pakistan is also losing interest in the project. Officials in Islamabad consider the TAPI pipeline project unsustainable for Pakistan without India’s participation. Pakistan would have to pay a transit fee of $500 million annually, not including a gas price of $7.5 per MMBtu (The News, November 6, 2024). The project would only be economical for Pakistan if India committed to paying a transit fee of $700–800 million per year to Pakistan. With India’s participation, Pakistan could save $200–300 million per year just in transit fees. India’s withdrawal from the project and Pakistan’s subsequent departure would mean an end to this pipeline, meaning Turkmenistan’s ambition and 30-year-long plans to export its gas to India and Pakistan’s major energy-starved markets would fail.