Turkmenistan plans to launch an international road show to find investors to help drive ambitious TAPI pipeline to deliver gas to India and Pakistan. Whilst the route will provide a vital third export option for Ashgabat, it faces a precarious journey through war-torn Afghanistan, which could push investment costs north to as much as $12bn.
Construction of the TAPI (Turkmenistan-Afghanistan-Pakistan-India) pipeline is expected to cost at least $7.6bn, with the price already inflated by the need to provide secure transit route across Afghanistan. While the Asian Development Bank (ADB) has already said it will fund part of the 1,735km route, the Turkmen government now says it plans to hold road shows in London and other investment capitals in September and October to raise additional funds, Reuters reports.
Turkmenistan has already signed agreements with the Indian and Pakistani gas utilities - GAIL and the Pakistani Inter State Gas Systems - on pricing for gas exports via Afghanistan. Construction of the pipeline will offer Ashgabat huge benefits by opening up a new gas export route to south Asia, in addition to its current twin options.
Until very recently, the country was entirely dependent on exporting its gas through Soviet infrastructure routed through Russia. However, the Central Asia-China gas pipeline opened a new market for Turkmenistan in late 2009. The country's third export option "will help the economic growth of the TAPI participant states and, more importantly, will contribute to regional peace, stability and security," Turkmen President Gurbanguly Berdymukhamedov told state television on July 27.
For India and Pakistan, TAPI represents a new source of gas for the two countries' growing populations and energy hungry economies. More than 30bn cubic metres will be shipped through the pipeline each year, with the majority to be shared between India and Pakistan. Afghanistan will receive a small share of the gas, but will mainly act as a transit state. However, there are concerns about the security of the pipeline where it crosses the war-torn country, especially after the withdrawal of NATO troops in 2014. The need for additional security could push the cost of the project as high as $10-12bn, according to some estimates.
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