This paper examines the Indian energy sector with special focus on the TAPI pipeline. The distance from major fossil fuel-rich countries to Indian borders are not more than 1000 to 2000 km either by sea or land route. The best possible mode for importing natural gas is the trans-national pipelines from Turkmenistan, Myanmar or Iran. Turkmenistan, Afghanistan, Pakistan and India Pipeline - the “TAPI Pipeline” is a 1735 km long land pipeline travelling through these countries.
This pipeline will have an annual discharge capacity of 33BCM and will play a crucial role for domestic demand and supply. The research objective of this thesis is to analyze different actors in risk, their role in the risks and their possible long term impacts. These risks are categorized as security, price, geopolitics, environment, legal, economical, production and demand-supply. The study develops some scenarios on the basis of changing circumstances, and examines some pertinent issues regarding the pipeline’s technical feasibility.
Table of Contents
Executive Summary
1.Introduction
1.1 Natural gas Utilization
1.2 TAPI Pipeline Facts
1.3 Natural Gas Production Scenario in participant countries
2. Literature Review
2.1 Natural Gas as a secondary fuel for India
2.2 Natural Gas Scenario for India
2.2.1 Conventional Natural Gas:
2.2.2 Unconventional Natural Gas
2.2.2.1 Coal Bed Methane
2.2.2.2 Shale Gas
2.3 Natural Gas Infrastructure of India
2.3.1 Pipelines
2.3.2 LNG Infrastructure
2.3.3 City Gas Distribution Infrastructure.
2.4 Indian Natural Gas Demand Scenario
2.4.1 Power Scenario of India
2.4.2 Fertilizer Sector of India
2.4.2.1 Natural gas dependency for fertilizer sector
2.5 Indian Natural Gas Supply Scenario
2.5.1 LNG Supply reduction in 2015-16
2.5.2 Negotiation Success
2.5.3 Average Availability of gas companywide
2.6 Indian Natural Gas Demand Supply Deficit
2.6.1 Trends in Supply of Natural Gas for India
2.7 Need for Natural Gas Cross Country Pipeline
2.8 Energy Comparatives
2.8.1 Chinese energy price comparison
2.8.2 China-India Pipelines Comparison
3. Research Methodology
3.1 Problem Definition
3.2 Type of Research
3.3 Research Process
3.4 Research Objectives
4.Data Analysis
4.1 Mapping of Demand Potential for natural gas pipeline in participated countries - India
4.2 Mapping of Natural Gas Supply Potential of Turkmenistan
4.2.1 Market Deterministic Approach:
4.2.2 Regression analysis and determination of supply potential for Turkmenistan
4.3 Risk Analysis of TAPI Pipeline
4.3.1 Mapping of geopolitical perspectives of TAPI pipeline assessment
4.3.1.1 Russian Perspective
4.3.1.2 Chinese Perspective
4.3.1.3 US, UK and Asia
4.3.2 Judgmental Analysis for Accessing Assessment of Risk on Judgmental basis with respect to US
4.4 Mapping of Pricing factors affecting natural gas pipeline in participating countries India
4.4.1 APM Pricing
4.4.2 NOC Pricing
4.4.3 Market base pricing
4.4.3.1 LNG import price
4.4.3.1.a Long Term LNG Pricing
4.4.3.1.b Spot LNG pricing
4.4.4 Pre- NELP pricing
4.4.5 NELP Pricing
4.5 Correlation model for Pricing of Natural Gas
4.6 Sensitivity Analysis for Pricing of Natural Gas
5. Mapping potential of economic factors of pipeline
5.1 Pipeline cost, Material cost, Labor cost and Compressor Cost
5.1.1Assessment of Tonnage for TAPI Pipeline
5.1.2 TAPI Pipeline Cost Assessment
5.1.3 Assumptions for Assessments
5.1.4 Project Cost
5.1.5 Interest During Construction
5.1.6 Financial Affordability of TAPI Pipeline Project
6. Strategy for Under Recoveries-Overburden of Adjustment of Natural Gas Price Differential
6.1. Opportunistic strategy
6.1.a Gas distribution with higher marketing margin
6.1.b Gas distribution with higher gas pricing
6.2. Negotiation strategy
6.2.a Cheaper natural gas purchase from Turkmenistan
6.2.b Discount in loan repayments by ADB
6.2.c Complete loan waiver from ADB
6.2.d Loan repayment by Turkmenistan
6.3. Development Strategy
6.3.a Allocation of different fund as Gas development from Oil Industry
6.3.b Reserved fund from financial institution
6.3.c Reserved fund from government in national financial budget
6.3.d Reserved fund under gas development scheme for India in the form of cess collection
6.3.e Dedicated fund from various manufacturing industries of India
6.3.f Collection of fund from industrial and domestic consumers
6.4. Cooperation Strategy
6.4.a Financial help from Turkmenistan government
6.4.b Financial help from other countries
6.4.c Financial help from other financial institutes
7. Future Implications with impact of some global events on pipeline project
7.1 Liberation of Kurdish Turkistan
7.2 BREXIT – Britain’s exit from European Union
8. Scope and Limitations
9. Conclusion
10. References
Objectives and Research Focus
The primary objective of this report is to conduct a comprehensive risk analysis of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline. The study aims to evaluate the various actors involved, their roles regarding risk factors, and the long-term impact on the participating nations' economies by examining security, pricing, geopolitics, environment, and supply-demand dynamics.
- Analysis of natural gas demand and supply potential in participating countries.
- Assessment of geopolitical and security risks impacting the pipeline project.
- Evaluation of economic and pricing factors, including material and construction costs.
- Development of strategic financial scenarios for the project's long-term sustainability.
Excerpt from the Book
1.3 Natural Gas Production Scenario in participant countries:
Natural gas has high potential for exploration and production in Turkmenistan as host country has reserves of close to 10 TCM and major oil companies already has productive assets in the region. Though country is widely criticized by Russia politically for making efforts to gain its potential in European market and eventually it shifts its prospects towards Asian markets by proposing pipeline two decades ago. But again as there is cold war going around the Caspian region which holds assets by several trillions of dollars and is the region of tug of war situation to explore it. Russia eventually enter into backing Turkmenistan to support by gaining rights to develop assets in host nation by Gazprom-Russia’s NOC for developing and producing of natural gas. The production of natural gas in terms of quantity in Turkmenistan is high during 1980-1989 when it was a part of USSR region and all petroleum assets were with Russia only. But after Russian federation dissolved in 1990 as part of communist revolution and end of cold war with US primarily, Turkmenistan gets independent access to natural resources when major petroleum assets were nationalized. This results into decreased production as country is starving for technology and buyers to explore the natural resources. After drastic governmental efforts, policy reforms and US supports result into extreme production growth and it remains increasing till 2007. Again after global recession due to subprime mortgage crisis by US where three largest market leaders in finance such as Lehmann Brothers are bankrupts in just a week which has higher global impacts with their national economies tumbling. These has adverse effects that results into significant losses of buyers and the production continue to decrease till 2009 and then rise again after 2011 as economies shows positive changes globally.
Summary of Chapters
1. Introduction: This chapter provides an overview of India's energy landscape, highlighting the country's dependence on fossil fuel imports and the growing strategic emphasis on natural gas and renewable energy sources.
2. Literature Review: The chapter examines the current refinery landscape in India, the role of natural gas as a secondary fuel, and analyzes both conventional and unconventional natural gas sources, including coal bed methane and shale gas.
3. Research Methodology: This section defines the logical approach and experimental research process used to identify risks and assess the geopolitical, economic, and security-related impacts of the TAPI project.
4. Data Analysis: This analytical chapter maps demand and supply potentials in India and Turkmenistan, conducts a detailed risk analysis including geopolitical perspectives, and models pricing factors affecting the natural gas pipeline.
5. Mapping potential of economic factors of pipeline: This chapter breaks down the economic components of the project, including pipeline, material, labor, and compressor costs, while establishing the financial assumptions required for the overall project cost assessment.
6. Strategy for Under Recoveries-Overburden of Adjustment of Natural Gas Price Differential: The chapter proposes various strategic approaches—including opportunistic, negotiation, development, and cooperation strategies—to manage and adjust for price differentials and financial burdens.
7. Future Implications with impact of some global events on pipeline project: This chapter discusses how global geopolitical events, such as the liberation of Kurdish Turkistan and the BREXIT process, might influence the TAPI pipeline project's future development.
8. Scope and Limitations: This section acknowledges the inherent limitations of the study regarding route estimations, reliance on international cost assumptions, and the unpredictability of governmental policy shifts.
9. Conclusion: The final chapter summarizes the project's viability, emphasizing that while TAPI remains the best long-term security option for India, success depends on managing complex geopolitical risks and finalizing cost-efficient pricing frameworks.
Keywords
TAPI pipeline, natural gas, energy security, India, Turkmenistan, geopolitical risk, gas pricing, energy infrastructure, pipeline economics, supply-demand deficit, coal bed methane, shale gas, regression analysis, LNG, financial modeling.
Frequently Asked Questions
What is the primary focus of this research?
The report focuses on the risk analysis of the TAPI (Turkmenistan-Afghanistan-Pakistan-India) natural gas pipeline project, evaluating its feasibility, economic impact, and geopolitical implications for the participating countries.
Which nations are participating in the TAPI project?
The project involves four primary participating nations: Turkmenistan (as the host/supplier), Afghanistan, Pakistan, and India.
What is the main objective of the research?
The objective is to identify and analyze key risk factors—such as security, geopolitics, price volatility, and supply-demand gaps—and assess their long-term impact on the involved economies.
What scientific methods were employed for this analysis?
The study utilizes descriptive and experimental research, employing statistical models, regression analysis for demand and supply forecasting, and risk matrix assessments to interpret quantitative and qualitative data.
What topics are covered in the main body of the report?
The body covers natural gas demand and supply scenarios, infrastructure development, geopolitical risk assessments concerning the US, UK, and Asia, detailed pricing models, and financial strategies for managing cost differentials.
What are the primary characteristics of the work?
The work is characterized by its focus on energy security, financial modeling for complex infrastructure, geopolitical sensitivity, and the implementation of strategic frameworks for international energy trading.
How does the project address the geopolitical risk of the TAPI pipeline?
The study assesses these risks by evaluating the perspectives of Russia and China, analyzing the political stability of the countries through which the pipeline travels, and incorporating judgmental analysis regarding international relations.
What financial strategies are proposed to handle price differentials?
The report proposes opportunistic strategies like increasing marketing margins, negotiation strategies such as securing discounts from Turkmenistan or debt repayment relief from the ADB, and development strategies involving dedicated gas funds.
How might global events like BREXIT impact the pipeline?
The report suggests that BREXIT could negatively affect Indian energy investment by reducing the business opportunities for British energy companies in the Indian market due to currency devaluation and economic restrictions.
What is the author's conclusion regarding the project?
The author concludes that TAPI is the most viable long-term energy security option for India, despite potential delays caused by geopolitical and security challenges, provided that aggressive efforts are made to execute the project.
- Citar trabajo
- Sandesh Ghandat (Autor), 2016, The Indian energy sector. A complete analysis with respect to the natural gas cross country pipeline TAPI, Múnich, GRIN Verlag, https://www.grin.com/document/337269
