Yes, you heard it right. Two major US oil companies are interested in the Turkmenistan-Afghanistan-Pakistan-India (Tapi) gas pipeline project, according to news reports. Indians are also in talks with their Pakistani counterparts over the shrouded future of this venture and talks are believed to have moved ahead in New Delhi. All this has come shortly after Pakistans Foreign Office and high level officials made strong comments that they shall proceed with the construction of the Iran-Pakistan (IP) gas pipeline.
The Tapi gas pipeline often makes headlines, shortly after there is some progress on the IP pipeline. Mere coincidence? Not quite. Meanwhile Pakistan faces severe energy crisis and gas imports are pivotal to its secure energy future.
Americas stance on the IP gas pipeline is known to all. Just recently, an official statement from US read, "Affirmation from the US side for its commitment to help Pakistan in its endeavours to resolve the energy crises..... We will continue to support Pakistan in its efforts to resolve this energy crisis". In all practical sense it meant that Pakistan should drop the IP dream, and go for the Tapi deal instead.
Pakistan has time and again stressed that it wants to pursue the IP gas pipeline but it faces many stumbling blocks, especially when it comes to the multi-billion dollar financing. But if Pakistan ever has to choose between the two, it would invariably opt for IP over Tapi anyway, given the cheaper price and significantly lesser risk that it carries, as against Tapi.
It goes without saying that Pakistan direly needs the IP project which should fetch 750 mmcfd of gas for 25 long years from Irans largest gas fields. The fact that Pakistan is still in infancy stage regarding the deal, still dealing with geographic surveys, either indicates the seriousness or the lack of it, in Islamabad or the intensity of pressure that is coming from Washington.
Tapi carries a very high risk premium, thanks to its location and the route which passes through the troubled areas of Afghanistan and Pakistan. The security situation is vulnerable for Pakistan to arrange finance and secure guarantees to the project lenders. Moreover, Tapi will take two to three years more than IP, and Pakistan cannot afford to lose more valuable time, given the current state of affairs.
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