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India Tests the Waters of Regional Integration With TAPI

Wednesday, June 6, 2012

In late-May, India, Pakistan, Afghanistan and Turkmenistan initialed a gas sale and purchase agreement (GSPA) for the long-envisioned Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project. The step is being seen regionally as a marker of seriousness for a project that until a few years ago was categorized as a dark horse when compared to the much-touted Iran-Pakistan-India (IPI) pipeline, itself currently on hold due to both Iranian inertia as well as Washington’s firm opposition to the project. For the United States, forward movement on TAPI serves to further isolate Iran from regional integration efforts, while showcasing the potential of its New Silk Road Initiative. However, given the limited amount of gas that India is stipulated to receive once the pipeline becomes a reality, it seems that New Delhi sees TAPI more as a test-bed for energy projects involving Pakistan, as well as a way to contract cheaper gas supplies from Central Asia before they end up being locked in by China.

The signing of the GSPA is a significant development, as it paves the way for inviting consortium bids to actually execute the $7.6 billion project on a build, own, operate and transfer basis. The planned 1,000-mile pipeline is designed to convey at least 90 million standard cubic meters per day (mscmd), 38 mscmd each for India and Pakistan and the remaining 14 mscmd for Afghanistan. It is envisaged to be functional by 2018 and supply gas for a three-decade period. ...

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