China To Join Turkmenistan-Afghanistan-Pakistan-India Pipeline?

Via Silk Road Briefing, an interesting look at the possibility of China joining the Turkmenistan-Afghanistan-Pakistan-India Pipeline:

China has expressed interest in joining the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project, by building a link from Pakistan to China. This could act as alternative to Chinese plans to build a fourth China-to-Turkmenistan pipeline. The China-to-Turkmenistan line has to cross several mountain ranges, and it would be cheaper and easier for China to build a line from Pakistan across the Karakoram Range to its Western border.

The Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline is a 1,814 km trans-country natural gas pipeline running between the four countries. Also known as the Peace Pipeline, the TAPI pipeline will begin in Turkmenistan and traverse Afghanistan to reach Pakistan and India. A stone-laying ceremony was held to commemorate the start of construction of the Turkmenistan-Afghanistan section of the pipeline in December 2015 in Mary, Turkmenistan, near the Galkynysh gas field. The ceremony marking the beginning of construction of the Afghanistan-Pakistan section of the pipeline was later held in February 2018.

A special-purpose consortium company known as the TAPI Pipeline Company Limited (TPCL) was incorporated in November 2014 by Turkmengaz (Turkmenistan), Afghan Gas Enterprise (Afghanistan), Interstate Gas Service (Pakistan), and GAIL (India) to execute the US$7.5 billion project. Turkmengaz is the majority shareholder in TPCL.

The pipeline has been designed to serve for a 30-year period and is expected to commence operations in 2020. It is expected to transport 33 billion cubic meters (bcm) of natural gas a year. Work on the TAPI gas pipeline in Pakistan was scheduled to commence in May, 2018, but could not start due to change in government. The newly elected administration of Imran Khan is expected to start doing it soon. The targeted timeline for project completion was 2021, but under an alternate plan, the project would be finished by 2020.

The state-owned companies of Pakistan and India are each expected to purchase 42 percent of the total volume of produced gas, equating to approximately 14 bcm. Afghanistan is expected to purchase 16 percent of the gas, which approximates to 5.11 bcm, and will also receive US$400 million a year in transit fees for the pipeline. The project is being funded by the Asian Development Bank, which is also acting as transaction adviser for the development.

TAPI may also be linked to the proposed Iran-Pakistan-India Pipeline. While the Iran-Pakistan portion is currently being constructed, India has yet to agree to continue it from Pakistan into India, citing security concerns. That may change given that China is prepared to use the TAPI route to divert gas from the Pakistan spur, and run that north-east into Xinjiang Province.

China already has gas distribution and processing facilities running into Xinjiang from Kazakhstan; however these are a lot further north. The implications here are that China could then develop an internal secondary, southern-based pipeline either skirting or passing through the Taklimakan and Gobi deserts to a more central based facility closer to Gansu Province.



This entry was posted on Wednesday, September 12th, 2018 at 7:20 pm and is filed under Afghanistan, China, India, New Silk Road, Pakistan, Turkmenistan.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

Comments are closed.


ABOUT
WILDCATS AND BLACK SHEEP
Wildcats & Black Sheep is a personal interest blog dedicated to the identification and evaluation of maverick investment opportunities arising in frontier - and, what some may consider to be, “rogue” or “black sheep” - markets around the world.

Focusing primarily on The New Seven Sisters - the largely state owned petroleum companies from the emerging world that have become key players in the oil & gas industry as identified by Carola Hoyos, Chief Energy Correspondent for The Financial Times - but spanning other nascent opportunities around the globe that may hold potential in the years ahead, Wildcats & Black Sheep is a place for the adventurous to contemplate & evaluate the emerging markets of tomorrow.