Comments on: Turkmenistan looks at TAPI project http://www.neweurasia.net/2008/05/01/turkmenistan-looks-at-tapi-project/ Fri, 16 May 2008 04:14:38 +0000 http://wordpress.org/?v=2.3.2 By: TABIBI Nadjib http://www.neweurasia.net/2008/05/01/turkmenistan-looks-at-tapi-project/#comment-92788 TABIBI Nadjib Sat, 03 May 2008 13:16:53 +0000 http://www.neweurasia.net/2008/05/01/turkmenistan-looks-at-tapi-project/#comment-92788 TAPI gas pipeline project : Energy Security Nadjib TABIBI May 1st, 2008 We are very pleased to witness the progress made relative the TAPI gas pipeline project which runs from the gas fields in Turkmenistan to India through Afghanistan and Pakistan. The construction of 1'680 km pipeline shall start by 2010 and it's anticipated to feed approx. 3.2 bn cubic feet of gas daily to the three recipient countries. Interestingly, the project has been re-evaluated at 7.6 billion dollars, double the project value in 2002 which was estimated at 3.2 billion dollars. It would interesting to look at the breakdown and the detailed adjustments. This step taken in Islamabad by all three recipient nations is an important step in view of granting energy security supplies for the coming years from Central Asia. It's time for Economics to beat Politics. Its time for Geo-economic factors to prevail over Geo-political interests! In terms of math, Turkmenistan has already consolidated its strategic position in terms of supplies of its gas with "Gazprom" of Russia that has started to pay handsomely for the Turkmen gas and also by launching the construction of the gas pipeline in September 2007 to China a major customer for Turkmen gas and Kazak crude oil. The agreement with China National Petroleum Company (CNPC) is the first serious initiative by the Turkmen government to open the doors for Turkmen exports as an alternative to Russian pipeline networks. I'm not mentioning the option that could be exercised by Turkmenistan to export through and to Islamic Republic of Iran through the existing pipeline and eventually to Turkey. Therefore, time is of essence in the realization of the TAPI project. Just as a reference and for a better understanding of the legal, technical, financial, security and environmental challenges involved is to look at the famous BTC (Baku-Tiblisi-Ceyhan) pipeline operated by BP where the financing package included 208 finance documents with over 17'000 signatures from 78 different parties and moreover. TAPI project calls for a great will by the recipient countries in view of hedging their future needs for energy products and to open a new gas supply corridor from Central Asia to the Indian sub-continent. This project will raise the transit importance of Pakistan and Afghanistan. It will contribute to the security of supply for all partner countries and it would be an unprecedented achievement to see this new and historic gas pipeline grid implemented. Its worthwhile to note, that the competition is not the IPI (Iran-Pakistan-India) pipeline project or Russia's Gazprom but is the consumption of China that shall surpass the US by end of the decade and that China is going through an unprecedented industrialization mobilization and urbanization process. We shall see a tense flow of Oil&Gas from CIS eastwards although there are lots of talks and projects for increasing the delivery of Oil&Gas through the Caspian transit countries between the Caspian Sea and the Black Sea and onwards to Europe through Republic of Azerbaijan and Georgia. The point that I'm trying to make here is that Turkmenistan has already consolidated its position with two important of its customers: Russia and China with an option for Iran (existing pipeline of Kurtkui) and indirectly to Turkey. It will require tremendous work and effort to sell the TAPI project which calls for an investment of 7.6 billion dollars to local and foreign investors, financial institutions, banks, multinational and transnational companies and insurance companies. Parallel to this the government of the recipient countries should jointly intensify their cooperation for bringing security and stability in the volatile areas through which the pipeline is to be constructed. The implementation of the TAPI project will be of an historical achievement for all parties involved and the region as whole but this could be done only with the intense and continuous support of leaders of all three recipient governments at its highest level and the relative competent executive bodies. Nadjib TABIBI Nadjib TABIBI is an Economist and a graduate from University of Geneva, Switzerland. He is currently involved in the Oil & Gas sector projects in Central Asia and the Caspian region. TAPI gas pipeline project : Energy Security

Nadjib TABIBI
May 1st, 2008

We are very pleased to witness the progress made relative the TAPI gas pipeline project which runs from the gas fields in Turkmenistan to India through Afghanistan and Pakistan. The construction of 1′680 km pipeline shall start by 2010 and it’s anticipated to feed approx. 3.2 bn cubic feet of gas daily to the three recipient countries.

Interestingly, the project has been re-evaluated at 7.6 billion dollars, double the project value in 2002 which was estimated at 3.2 billion dollars. It would interesting to look at the breakdown and the detailed adjustments.

This step taken in Islamabad by all three recipient nations is an important step in view of granting energy security supplies for the coming years from Central Asia.

It’s time for Economics to beat Politics. Its time for Geo-economic factors to prevail over Geo-political interests!

In terms of math, Turkmenistan has already consolidated its strategic position in terms of supplies of its gas with “Gazprom” of Russia that has started to pay handsomely for the Turkmen gas and also by launching the construction of the gas pipeline in September 2007 to China a major customer for Turkmen gas and Kazak crude oil. The agreement with China National Petroleum Company (CNPC) is the first serious initiative by the Turkmen government to open the doors for Turkmen exports as an alternative to Russian pipeline networks. I’m not mentioning the option that could be exercised by Turkmenistan to export through and to Islamic Republic of Iran through the existing pipeline and eventually to Turkey.

Therefore, time is of essence in the realization of the TAPI project. Just as a reference and for a better understanding of the legal, technical, financial, security and environmental challenges involved is to look at the famous BTC (Baku-Tiblisi-Ceyhan) pipeline operated by BP where the financing package included 208 finance documents with over 17′000 signatures from 78 different parties and moreover.

TAPI project calls for a great will by the recipient countries in view of hedging their future needs for energy products and to open a new gas supply corridor from Central Asia to the Indian sub-continent. This project will raise the transit importance of Pakistan and Afghanistan. It will contribute to the security of supply for all partner countries and it would be an unprecedented achievement to see this new and historic gas pipeline grid implemented.

Its worthwhile to note, that the competition is not the IPI (Iran-Pakistan-India) pipeline project or Russia’s Gazprom but is the consumption of China that shall surpass the US by end of the decade and that China is going through an unprecedented industrialization mobilization and urbanization process. We shall see a tense flow of Oil&Gas from CIS eastwards although there are lots of talks and projects for increasing the delivery of Oil&Gas through the Caspian transit countries between the Caspian Sea and the Black Sea and onwards to Europe through Republic of Azerbaijan and Georgia.

The point that I’m trying to make here is that Turkmenistan has already consolidated its position with two important of its customers: Russia and China with an option for Iran (existing pipeline of Kurtkui) and indirectly to Turkey.

It will require tremendous work and effort to sell the TAPI project which calls for an investment of 7.6 billion dollars to local and foreign investors, financial institutions, banks, multinational and transnational companies and insurance companies. Parallel to this the government of the recipient countries should jointly intensify their cooperation for bringing security and stability in the volatile areas through which the pipeline is to be constructed.

The implementation of the TAPI project will be of an historical achievement for all parties involved and the region as whole but this could be done only with the intense and continuous support of leaders of all three recipient governments at its highest level and the relative competent executive bodies.

Nadjib TABIBI

Nadjib TABIBI is an Economist and a graduate from University of Geneva, Switzerland. He is currently involved in the Oil & Gas sector projects in Central Asia and the Caspian region.

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