BISHKEK (TCA) — Turkmenistan is pushing the implementation of the Turkmenistan–Afghanistan–Pakistan–India (TAPI) gas pipeline project, which, if completed, will diversify the country’s gas exports. The project’s funding, however, remains a serious impediment to its implementation. We are republishing this article on the issue by Rauf Mammadov, originally published by The Jamestown Foundation:

Turkmenistan’s President Gurbanguly Berdimuhamedov visited the United Arab Emirates and Kuwait in mid-March as part of a campaign to revive a long-stalled natural gas pipeline from his country to Pakistan and India (Neftegaz.ru, March 16). The visit occurred three weeks after a February 23 groundbreaking ceremony marking the latest effort to put the Turkmenistan–Afghanistan–Pakistan–India (TAPI) pipeline back on track. The ceremony, held on the Turkmenistan-Afghanistan border to initiate the second stage of the pipeline—which will run through Afghanistan—was a high-profile affair. In attendance were Berdimuhamedov, Afghan President Ashraf Ghani, Pakistani Prime Minister Shahid Khaquan Abbasi and India’s Minister of State for External Affairs Mobashar Jawed Akbar (RBK, February 23).

The event was another milestone for the project, first conceived 20 years ago. Turkmenistan had finished its section of the pipeline in 2017, thanks to financing from the Saudi Fund for Development (Trend, January 30). Although the start of the second segment has raised hopes the pipeline will be completed by 2019, a number of crosswinds buffet the project. Not least of these is opposition from Russia, which sees TAPI as a threat to its attempts to maintain a stranglehold on oil and gas in the region.

Although Turkmenistan has the world’s sixth-largest gas reserves, it is using only one of its three existing export pipelines at the moment—sending 30 bcm per year to China (Eia.gov, accessed March 28). It has stopped shipping gas through a pipeline to Russia over a price disagreement and through a pipeline to Iran over a payments dispute (Vedomosti, August 13, 2017). Because natural gas exports account for most of Turkmenistan’s revenue, it desperately needs to diversify its customer base, and TAPI would play a key role in that.

If completed, the $10 billion pipeline will deliver 33 billion cubic meters (bcm) of gas per year from Turkmenistan’s Galkynish field, the world’s second-largest, to energy-hungry Pakistan and India. It will run along the Kandahar–Herat highway, in Afghanistan, to Quetta and Multan, in Pakistan, and on to Fazilka, India (Adb.org, accessed March 28). The pipeline will pass through Afghanistan’s Herat Province, which the Taliban controls. However, the Taliban has pledged to support the pipeline’s construction, provided no companies or development agencies from the United States are involved (Lenta.ru, March 5).

Turkmenistan’s state-owned Turkmengaz is the leader of the consortium that will operate TAPI, with 85 percent ownership. ISGS of Pakistan, Afghan Gas Enterprise, and India’s GAIL will each have a 5 percent stake. The Asian Development Bank, which has been involved in TAPI since its inception in the mid-1990s, is the project’s key financial advisor.

On November 8, 2017, the Islamic Development Bank agreed to loan Turkmenistan $700 million to complete its section of TAPI. In the same month, Turkmenistan’s State Bank for Foreign Economic Affairs also signed a loan agreement with the Saudi Development Fund (Tfeb.gov.tm, accessed March 28, 2018). However, the overall cost of the project amounts to almost a third of Turkmenistan’s gross domestic product. Thus, additional financing is needed to make it happen.

Berdimuhamedov’s visit to the UAE and Kuwait can be interpreted as an effort to seek the remainder of the funding from the region. On his trip to the Gulf, Berdimuhamedov asked his hosts to take part in the pipeline project. Consequently, Turkmengaz signed memorandums of understanding on cooperating in the project with the Emirates’ Mubadala Fund and Kuwait Petroleum Corporation (Tdh.gov.tm, March 13).

Meanwhile, Moscow has continued to push against the TAPI project. Last October, Russian President Vladimir Putin visited Ashgabat for the first time in five years (RBK, October 2, 2017). Although the TAPI pipeline was not part of his formal discussions with Berdimuhamedov, behind closed doors, Putin reportedly tried to dissuade the Turkmenistani leader from moving forward on it (Natural Gas World, November 24, 2017).

Russia has persistently pressured Central Asian countries to continue exporting their oil and gas to the West, China and elsewhere through Russian pipelines. One reason is to give it leverage over supplies to Western Europe. Another is so it can profit from transit fees on oil and gas surging through its pipelines. But an additional reason that Russia would like to see TAPI scrapped is that it has begun exporting more liquefied natural gas (LNG), including to the lucrative markets of Pakistan and India. At the moment, Qatar is the largest LNG supplier to India and Pakistan, but Russian companies are interested in grabbing a share of this business.
As Russian Foreign Minister Sergei Lavrov noted on February 20, after talks with his Pakistani counterpart, “Russia and Pakistan are evaluating options for LNG exports from Gazprom LNG to Pakistan, as well as construction of transnational pipeline projects, including the Iran–Pakistan–India pipeline” (RIA Novosti, February 20).

RT-Business Development, a subsidiary of Russia’s state-owned Rostekh Bank, won the bidding to build the $2.5 billion 1,100-kilometer North–South gas pipeline across Pakistan, which will ship 12.3 bcm of Qatari LNG per year, from Karachi north to Lahore (Rt-rb.ru, accessed March 28). Meanwhile, Gazprom and India’s GAIL have confirmed that the Russian gas giant will start supplying LNG to India in 2018 (Vestifinance.ru, January 16).

Turkmenistan continues to dream about another pipeline that would send its gas across the Caspian Sea to Azerbaijan, where it would connect with a transit network that would eventually supply the gas to Europe. The Trans-Caspian Pipeline project has long been beholden to negotiations over the final status of the Caspian. But in December 2017, after the latest meeting of the five Caspian littoral states, Lavrov made a surprise announcement that the participants had agreed on “all outstanding issues with respect to the status of the Caspian Sea (Caspianbarrel.org, December 11, 2017). This appeared to signal that Russia would not stand in the way of a pipeline along the Caspian seafloor. At the same time, Turkmenistan announced the completion of a pipeline connecting the gas fields in its east with its western Caspian Sea coast. Together, these developments have revived hopes in Turkmenistan and Europe that the long-sought Trans-Caspian Pipeline project might be revived.

For now, however, TAPI continues to be a higher priority for Turkmenistan—and hopes for its completion extend far beyond Ashgabat, despite Moscow’s negative pressure. The pipeline could help ease energy shortages in the countries it will serve, increase the chances for peace in troubled southwest Asia, and could even help normalize relations between India and Pakistan. A lot is thus on the line in central Eurasia.

ASHGABAT (TCA) — The U.S. Agency for International Development (USAID) Competitiveness, Trade, and Jobs Program in Central Asia, in partnership with the Turkmenistan Union of Industrialists and Entrepreneurs (UIE), held a seminar for local producers to help strengthen their export potential, the American Embassy in Ashgabat said on March 28.

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DUSHANBE (TCA) — The International Finance Corporation (IFC), a member of the World Bank Group, is investing $2 million to support the expansion of Tajero, one of Tajikistan’s largest food distribution networks, strengthening its food supply chain and benefiting small and medium enterprises within its network.

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ASTANA (TCA) — The National Bank of Kazakhstan has launched a blockchain-based mobile securities trading application which it hopes will allow local citizens to become more involved in the capital markets by simplifying access to it, RFE/RL reports.

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TASHKENT (TCA) — Human Rights Watch (HRW) says in a new report that journalists and other critics of the government in Uzbekistan remain under pressure from legal restrictions, politically motivated prosecutions, and fear-induced self-censorship, RFE/RL reported.

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BISHKEK (TCA) — As relations between Uzbekistan and Tajikistan have warmed following top-level bilateral meetings, it has become much easier for ordinary Tajiks and Uzbeks to cross the previously tightly-controlled border for visiting relatives in the neighboring country. We are republishing this article on the issue, originally published by Eurasianet:

“And who are you?” Robiya Rahmonova asked expectantly one March morning when a stranger appeared at the gate outside her home in Panjakent, in northwest Tajikistan.

For three days, Robiya, a 58-year-old housewife with a ready smile, had been “expecting guests from Uzbekistan.”

Tajik state television had bombarded viewers with interminable footage of a recently concluded visit from Uzbek President Shavkat Mirziyoyev.

When Robiya’s family heard the news and watched Mirziyoyev on TV hugging his Tajik counterpart and calling one another brothers, they cried with happiness.

“On television they said that there would be a visa-free regime between the countries. I am waiting for my relatives to come and visit,” Robiya said.

As it turned out, the excitement was slightly premature. The visas were not to be scrapped for a few days yet.

Every other family in Panjakent, a lively market town set in the Zeravshan Valley, has relatives across the border. Robiya has eight sisters and brothers in the village of Shopulod, in Uzbekistan, around 40 kilometers away as the crow flies.

Back in the old times, when the Soviet Union was still around, young people thought nothing of borders. Finding a spouse from a nearby town or city was in the natural order of things.

It was four decades ago that Robiya and her husband’s family arranged their nuptials. Their fathers were fast friends and both seasoned circumcisers. It seemed a natural idea to fasten this bond through marriage, although Robiya’s father was initially reluctant because the distance between their homes felt too far. But his guardian spirits tormented him for his prevarication — his children explain — interfering with his work as a circumciser, and he finally relented.

In any case, it was not too difficult to shuttle between homes. Buses then ran hourly along the route from Samarkand, in the Uzbek SSR, to Panjakent, in the Tajik SSR. A ticket cost one Soviet ruble, which in those days would buy fives loaves of bread.

“We didn’t know what a border was, what another state was. We visited one another without a thought. My siblings could come at lunchtime and leave in the evening. It is so unfair now. When we talk about Samarkand, my grandchildren ask: ‘Where is that anyway?’” Robiya said.

Robiya was the third of the nine in the family. Her closest sister was Mukarram, the eldest of the children. They weren’t just siblings, they were close friends.
And then history got in the way. The Soviet Union collapsed and a shared land became two countries. Over the years, the borders got harder.

“It all happened gradually,” said Mukarram, sitting in the living room of the family home in Shopulod, around a half-hour drive from Samarkand. “In the Soviet Union, we didn’t understand that we were crossing a border. Then they built a checkpoint. They began inspecting [documents]. Then they began wanting to see everything that we were carrying with us. The last time I went to Panjakent was in 2010.”

It was that year that the bureaucratic hurdles, most notably the mandatory visas, were given a concrete form in the shape of a three-meter brick wall erected by the Uzbeks across the border checkpoint.

“When they built the wall, all that was left for us was to cry,” said Mukarram.

Robiya has visited her relatives in Uzbekistan three times since 2010.

First she would have to travel to the Tajik capital, Dushanbe, where the Uzbek Embassy is based.

After a week or so of waiting, she would travel back up north through high mountain passes and cross into Uzbekistan at one of the only two border posts still in operation.

“That cost 500 somoni ($56) and a whole day. From here you should be able to stick out your hand and pay 20 somoni [to a taxi driver]. When my uncle died, because I didn’t have a visa, I could not pay my respects,” Robiya said.

The final sums of money involved are an onerous outlay for a low-earning Tajik household. Making the trip for a special event — a wedding or a memorial wake — would also entail the expense of obtaining a respectable gift, just another barely affordable luxury.

Robiya’s husband, Adham Haidarov, said that popping over to Uzbekistan used to be a fun and easy day out.

“Our Panjakent is nice too, but we would go to Samarkand for picnics. Young people used to go to hang out in Samarkand,” he said forlornly.

Matters took a turn for the better following the death in 2016 of Uzbek President Islam Karimov, who was actively hostile to bordering nations. His successor, Mirziyoyev, has by contrast actively pursued a good neighbor policy.

In a symbolic gesture of how relations have begun to blossom anew, on the first day of March, the border wall near Panjakent was ripped down. A little over a week later, Mirziyoyev flew to Dushanbe for a two-day visit that produced a visa-free agreement and several economic deals.

People living near the border in Tajikistan immediately began putting their mind to what line of trade they could get into. For people living in Panjakent and nearby, going to Samarkand will become considerably simpler than a trip to Dushanbe or even Khujand, Tajikistan’s second-largest city, in the north. Before, many thought in terms of importing wares from as far afield as Istanbul, but Uzbekistan now presents a more appealing alternative.

For the time being, entrepreneurs are still in the stage of taking stock of opportunities.

One trader at Panjakent market, a circular high-walled hubbub of commerce set against an imposing mountain backdrop, told Eurasianet that he had crossed over to Uzbekistan without waiting for the visa-free regime to come into force and returned with a haul of shovels to sell. He seemed a little disappointed, however, reporting that similar items from Istaravshan, a northern Tajik town famed for its metalwork, were of much better quality.

Border guards have adapted quickly to the changes. Passage through the border takes minutes, a vivid contrast with the times when gruff Uzbek customs officials would often force travelers to unpack all their bags and account for all the contents. When Eurasianet correspondents made the crossing, one Uzbek official in plainclothes asked meekly to check a mobile phone for extremist content or pornography, but demurred immediately when challenged.

It is a 20-minute drive from the border to Shopulod, where Robiya grew up. The village is a patchwork of small enclosed farmsteads. It took only a few quick enquiries of passing villagers to track down the Rahmonov family home.

Like her sister, Mukarram, 63, was quick to raise her hopes.

“When they said that the border was being opened, that very day, I took my children and grandchildren to the border. But it turned out that there were still formalities stopping us from getting across,” she said.

All the family agrees that it is the Uzbek side’s turn to make the trip. When the nearest border crossing was closed, it made more sense for Robiya to undertake the roundabout trip. After all, she was alone, while for the whole family to go the other way would have been a major operation.

“Every time she came we would hold a tui,” Mukarram said, referring to the banquet held to mark special events like birth and weddings. “We would be in tears taking her back to the border. Now it is our turn to go. She will play the host.”