TAPI Unlikely to Challenge Iran-Pak Pipeline Project

EghtesadOnline: Turkmenistan-Afghanistan-Pakistan-India gas pipeline project is unlikely to pose a challenge to a postponed plan to export Iran's natural gas to Pakistan, Oil Minister Bijan Namdar Zanganeh said.

News ID: ۷۴۴۷۸۹

31 January 2018

"The implementation of the project to supply gas to India to compete with the [Iran-Pakistan] Peace pipeline is unlikely," Zanganeh was quoted as saying by IRNA on Tuesday.

TAPI is a planned 1,800-kilometer stretch of pipeline aimed at transferring natural gas from Turkmenistan to India.

With a capacity to transfer up to 33 billion cubic meters of gas annually, TAPI, which will also run through Pakistan, can undermine the Iran-Pakistan gas pipeline project, which has been shelved despite making significant progress in Iran's territory, according to Financial Tribune.

"It is an extremely difficult and remarkable task to mend ties between Pakistan and India," Zanganeh said, playing down the prospects of collaboration between the two states whose ties are overshadowed by mistrust and war.

The minister made the remarks following reports that Saudi Arabia is planning to finance TAPI, a move that could undermine Iran's efforts to revive the protracted gas pipeline project with Pakistan.

Earlier this month, news agencies cited Maksat Babayev, Turkmenistan's deputy prime minister in charge of the fuel and energy sectors, as saying that Saudi Arabia would make "considerable investments" in the construction of TAPI.

Besides financial constraints, the pipeline also faces security risks in Pakistan and Afghanistan, a hotbed of militant groups.

Zanganeh blamed Pakistan of underperforming in its joint gas pipeline project with Iran.

"Pakistan is not collaborating [to complete the pipeline]," Zanganeh said.

According to reports, about 900 kilometers of the pipeline have been laid in Iran, but Pakistan has dithered over constructing 700 kilometers of the pipeline in its territory. The pipeline was envisaged to carry over 20 mcm of Iranian gas daily to Pakistan.

Obstacles

"There are obstacles ahead of the [TAPI] pipeline," Zanganeh said, arguing that Saudi Arabia and the United States could put a spanner in the pipeline project.

Islamabad has failed to show sufficient determination to complete the pipeline on its territory even after the Jan. 2016 lifting of sanctions, blaming financial constraints.

To meet its energy demand, Islamabad signed a deal in 2015 to import liquefied natural gas from Qatar for 15 years. The deal with the world's largest LNG producer has further dampened the prospect of the Peace pipeline with Iran.

Pakistani officials said in October that 700 kilometers of the pipeline inside the country were expected to be completed in two years, largely via Chinese finance. But some officials and analysts say low LNG prices in the international market have diverted Pakistan's attention from the IP gas pipeline project to attractive options such as Qatar's LNG.

Iran exports about 30 million cubic meters of gas per day to Turkey and some 12 mcm/d to Iraq.

But it is eying plans to transport gas to Oman through a subsea pipeline and construct facilities to produce LNG, a super-cooled gas that can be transported by vessels instead of a pipeline.