Page 5 - AsianOil Week 45

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that, if any pipelaying has taken place, it did not begin until this year.
In Afghanistan, officials in Herat Province bordering Turkmenistan revealed in October that land requisitions along TAPI’s proposed route had only just got underway, while no work has taken place in either Pakistan or India.
The challenges facing TAPI are well doc- umented. First there are the security issues in Afghanistan, where both the Taliban and Islamic State remain active. Then there are the hostile relations between India and Pakistan, with the former wary of entrusting the latter with its energy security.
Because of these obstacles, TAPI is far from reaching financial close. Turkmenistan has pledged to cover 85% of the pipeline’s cost, esti- mates for which vary between $7bn and $10bn, with Afghanistan, Pakistan and India agreeing to fund 5% each. Press reports claim that the Saudi-based Islamic Development Bank and the Philippines-based Asian Development Bank (ADB) have pledged support, but NewsBase has been unable to verify these claims. Over the past year Turkmenistan has also sought out financing from European banks and export agencies, but so far without luck.
The longer TAPI fails to make progress, the even less likely it is that India and Pakistan will continue supporting the project. Both countries are aiming to develop their LNG import capacity as a more realistic means of covering their future gas needs.
TCP
Turkmenistan’s prospects for getting TCP off the ground are equally bleak.
The proposed pipeline would run from west- ern Turkmenistan along the Caspian seabed to eastern Azerbaijan, where it would connect with the Southern Gas Corridor (SGC) network, which is due to start pumping gas to southern Europe next year. Like TAPI, its construction was first mooted in the years that followed Turk- menistan’s independence from the Soviet Union in late 1991. But Russia and Iran, two of the Cas- pian’s other littoral states, have bitterly opposed it.
The convention on the Caspian Sea’s legal status, reached between all five Caspian coun- tries last year, established that two littoral states could build a pipeline between their territorial waters without the consent of the others. But it also included a proviso that other states could block such a project if it was deemed to have an environmental risk. Iran and Russia have both indicated they would take this step if Azerbaijan and Turkmenistan ever reached an agreement on TCP. And in any case, Iran is yet to ratify the Caspian convention.
Beyond this political obstacle, TCP’s com- mercial logic is also questionable. Turkmeni- stan’s gas would have to travel a long way to reach European markets, raising its cost. And there are doubts that Europe, which currently has plenty of spare gas import capacity, has much need for these extra supplies.™
Week 45 13•November•2019 w w w . N E W S B A S E . c o m P5