Pakistan is working to extend its Foreign Investment Promotion and Protection Act (FIPPA) to cover Turkmenistan’s investment in the project of transnational gas pipeline Turkmenistan-Afghanistan-Pakistan-India (TAPI), Pakistani news outlets report.
This decision, announced by a senior energy ministry official on Tuesday, offers valuable guarantees to the Turkmen government, potentially enhancing the project’s bankability.
Estimated at $10 billion, the TAPI pipeline promises to transport natural gas from Turkmenistan through Afghanistan and into Pakistan. Turkmenistan holds the lion’s share of the project with an 85% stake, while Afghanistan, Pakistan, and India each hold 5%.
Previously reserved for protecting foreign investment in the Reko Diq mine, the FIPPA now grants comprehensive safeguards to Turkmenistan’s involvement in TAPI. This initiative builds on Pakistan’s existing commitment to secure Turkmen investment through a sovereign guarantee under the Host Government Agreement (HGA), which was signed in 2016 along with the Gas Pipeline Framework Agreement (GPFA).
Experts are currently scrutinizing how the existing agreements under GPFA and HGA align with the incentives offered by FIPPA. Their findings will be presented to the SIFC (Special Investment Facilitation Council) Apex Committee by 31 December 2023 for the federal cabinet’s final decision.
In June 2023 Pakistan and Turkmenistan signed a Joint Implementation Plan (JIP) to expedite the TAPI project. As part of this plan, Pakistan suggested extending the pipeline construction further into Afghanistan up to Herat to ensure the ownership from the Taliban, which will also help move the project forward.
Recently, Turkmenistan’s Foreign Minister Rashid Meredov visited Herat. Energy cooperation took center stage at negotiations with senior Taliban officials. Meredov expressed readiness to start work on TAPI gas pipeline project in Afghanistan in the near future. One day after meeting with Meredov, Afghanistan’s foreign minister Amir Khan Muttaqi said that work on the TAPI project will begin soon.
Spanning 1,849 kilometers, the TAPI pipeline will ultimately pump natural gas from Turkmenistan’s Galkynysh field to Pakistan and India via Afghanistan. With a diameter of 56 inches, it aims to deliver up to 33 billion cubic meters (bcm) of gas annually for 30 years. ///nCa, 21 December 2023