Talks on Tapi

It is no secret that Pakistan has gas problems, but this should not mean that the country must bow down to whatever price it is offered. In this light, Pakistan has taken a bold decision to ask Turkmenistan to review the gas price deal under the Tapi gas pipeline. The $8 billion pipeline is now being held down due to Pakistan’s insistence that the price of gas needs to be pushed down before the groundwork is laid for the pipeline. All three buyers – Afghanistan, Pakistan and India – had agreed to gas prices with Turkmenistan on a bilateral basis, but now all three want the prices to be made public, which will then be the basis for renegotiations. Pakistan wrote a letter five months ago on the matter. Now, a delegation of the Turkmen gas company will come to Pakistan later this month for talks on the deal with Pakistan. With the route through Pakistan crucial to the deal, Pakistan is in a strong position to renegotiate the agreement – but it will need to be realistic about what is achievable. The project is set for ground breaking in October 2019 and is projected to be operation by 2020.

Pakistan can ill afford a delay in the project, what with its ongoing gas shortages. Around 800 kilometres of the pipeline will pass through Pakistan before entering India. Work on the project has already started in Afghanistan last year. After being in the works for over a decade, this is not the time to delay the project further. One must, of course, wonder why the objections to the negotiated rates came so late in the day. Such projects are agreed over years, which makes it the wrong time to cause a hitch. That said, there is little question over the need to renegotiate gas rates with Turkmenistan. One can hope that the matter is resolved quickly in the meetings this month. Gas remains integral to Pakistan’s economic growth. Already, gas shortages continue to cause billions in economic losses every year. It would have been much better for such projects to have been in place before time – rather than now, when the ongoing gas shortages weaken Pakistan’s position in bargaining. However, Pakistan retains a strong position to push a decision that is acceptable to both parties. One would hope that the matter gets resolved in the meetings this month.