The operational accord signed by Turkmenistan, Afghanistan, Pakistan and India over the TAPI pipeline is yet another indication of the government’s ‘hit and miss’ approach towards finding solutions for the energy crisis. After a year and a half of stating that the Iran-Pak gas pipeline would be completed, the PML-N, like others before it, has seemingly succumbed to US pressure, and hammered the final nail in the coffin of the IP pipeline by choosing the longer, more unreliable road. For now, there are many issues to resolve even before the planning for the construction can be initiated, such as: which company will lead the consortium that will construct the pipeline? how will anyone get Turkmenistan to agree on giving up a portion of its profit to entice bigger corporations? And so on. The IP gas pipeline was all but complete on the Iranian side, and our decision to sign a different accord instead of completing work on our side is not likely to please Iran.

However, there are other reasons to prefer the IP pipeline over TAPI other than going against a contract that stipulates that Pakistan would have to pay a daily penalty of $ 1 million if work on our side was not completed by January 1st of this year. Iran was willing to waive this penalty in their eagerness to make us finish construction, but making plans to construct a different pipeline might soon change their minds. Gas imported through the IP pipeline was estimated to be at $11 per MMBTU, which is lower than TAPI’s valuation at $13 per MMBTU. The TAPI pipeline will however, have a higher initial capacity of 27 billion cubic meters per annum, a significant increase over the agreement with Iran of Pakistan importing 8.7 billion cubic meters in the first year, but Pakistan will only receive 42 % of this, which brings the annual amount of gas imported through TAPI at 12.5 billion cubic meters.

As far as routes go, there were reservations about the IP pipeline’s passage through troubled areas of Balochistan, and while this issue is less prominent with TAPI considering it will pass through more stable areas of the province, TAPI will also cross through all of Afghanistan, which gives militants in the country ample opportunity for sabotage. Work is expected to begin next year, with the date for completion set at 2017, and while there is a chance that it will improve relations between the four countries, with more players at the party, there is always the threat that disagreements over planning or Afghanistan’s smaller share in the import will usher in a new era of distrust and hostility.