Tariq Saeedi
In the previous part of this report, we saw that Afghanistan can step up to consume larger volumes of gas from TAPI.
Now, we must construct the scenarios for Pakistan to absorb the remaining volumes from TAPI. This brings us to a whole new world of possibilities. This also opens the gates for substantial partnership between Pakistan and Central Asia. Consequently, it shows that TAPI without India could actually be quite profitable.
Table 4: Pakistan’s Gas Utilization Options Beyond Direct Consumption
Scenario Analysis: What Pakistan Can Do With TAPI Gas
| Utilization Option | Volume Needed | Revenue Potential | Investment Required | Timeline | Strategic Value |
| 1. Direct Consumption (High-Value Sectors) | 1,325 MMCFD | See previous tables in Part Three | Minimal | Immediate | Base case |
| 2. Polymer Production | 500-800 MMCFD | $3-5 billion/year | $5-8 billion CAPEX | 4-6 years | High value-add |
| 3. Fertilizer Expansion | 200-300 MMCFD | $800M-1.2B/year | $1-2 billion | 3-4 years | Food security + exports |
| 4. Methanol/Chemicals | 300-500 MMCFD | $1.5-2.5B/year | $3-5 billion | 4-5 years | Diversification |
| 5. GTL (Gas-to-Liquids) | 400-600 MMCFD | $2-3 billion/year | $8-12 billion | 6-8 years | Diesel/kerosene production |
| 6. LNG Export Facility | Variable | Market-dependent | $3-5 billion | 5-7 years | Revenue generation |
| 7. Regional Re-export | Variable | Transit + markup | $500M-1B pipeline | 3-4 years | Regional hub status |
Key Insight: Even without India, Pakistan can utilize ALL TAPI gas profitably through value-added processing, not just direct combustion.
Table 5: Global Polymer Market Growth & Price Trends (2024-2035)
| Polymer Type | 2024 Market Value | 2032-2035 Projection | CAGR | Key Applications | Price Trends ($/MT) |
| Total Polymer Market | $666.1 billion | $993 billion (2032) | 4.6% | All sectors | Growing steadily |
| Polyethylene (PE) | $129.92 billion (35% share) | $191.42 billion (2033) | 4.4% | Packaging, construction, automotive | $800-1,400/MT |
| Polypropylene (PP) | $133-140 billion | $194-224 billion (2032-34) | 4.2-5.3% | Automotive, packaging, textiles | $900-1,500/MT |
| Polyolefins (PE + PP) | $274.22 billion | $382.56 billion (2032) | 4.2% | Combined demand | Stable growth |
| Asia-Pacific Share | 50-56% (2024) | 51.78% (2034) | 5.3-5.6% | Fastest growing region | Pakistan positioned well |
Sources: P&S Intelligence, Straits Research, Fortune Business Insights, Data Bridge Market Research, Polaris Market Research
Key Market Drivers:
- Global polymer market valued at $666.1 billion in 2024, expected to reach $993 billion by 2032, growing at 4.6% CAGR
- Polyethylene market projected to grow from $129.92 billion (2024) to $191.42 billion (2033) at 4.4% CAGR
- Polypropylene market growing from $133-140 billion to $194-224 billion by 2032-2034 at 4.2-5.3% CAGR
- Asia-Pacific dominates with over 50% market share, driven by China, India, and Southeast Asia
Table 6: Economics of Polymer Production Using TAPI Gas at Gwadar/Pasni
Base Case: 500 MMCFD Gas Allocation for Polymer Complex
| Parameter | Specification | Calculation Basis | Annual Output/Value |
| Gas Input | 500 MMCFD | Dedicated to polymer production | 182.5 BCF per year |
| Gas Cost | $10-11/MMBTU | TAPI delivered price | $1.83-2.01 billion |
| Polyethylene Output | 1.2 million MT/year | Industry standard: 380 MT gas input per ton PE | 1,200,000 tonnes |
| Polypropylene Output | 0.4 million MT/year | Blend with PE for diversification | 400,000 tonnes |
| Total Polymer Output | 1.6 million MT/year | World-scale facility | 1,600,000 tonnes |
| PE Sales Revenue | $960-1,680M/year | Market price: $800-1,400/MT | $1.32 billion (mid-range) |
| PP Sales Revenue | $360-600M/year | Market price: $900-1,500/MT | $480 million (mid-range) |
| Total Revenue | $1.32-2.28 billion/year | Market prices | $1.8 billion (mid-range) |
| Operating Costs | $300-400M/year | Labor, utilities, maintenance | $350 million |
| Gross Margin | $620M-1.53B/year | Revenue minus gas and operations | ~$650M (conservative) |
| Net Margin | 35-40% | Industry standard | $280-380M annually |
| CAPEX | $5-8 billion | Integrated complex at Gwadar | One-time investment |
| Payback Period | 13-20 years | Based on net margin | 15 years (mid-case) |
| NPV (20 years) | $3.5-6.0 billion | At 8% discount rate | Highly positive |
| Employment | 3,000-5,000 direct | Plus 15,000-20,000 indirect | Significant |
Strategic Advantages:
- Value Addition: Converting $10-11 gas into $1,125 per tonne product (67% gross value addition)
- Export Earnings: $1.2-1.6 billion annual exports (assuming 70% export, 30% domestic)
- Import Substitution: Pakistan imports $2+ billion polymers annually – 60-80% can be replaced
- Technology Transfer: Joint ventures bring world-class technology
- Cluster Development: Attracts downstream plastics manufacturing
Table 7: Gwadar/Pasni Polymer Complex – Infrastructure Status & Requirements
| Infrastructure Element | Current Status (2024-2025) | TAPI Enhancement | Additional Investment |
| Gwadar Port | Operational since 2016 Deep water capability | TAPI pipeline terminus Direct gas supply | $500M expansion |
| Gwadar Industrial Estate | 3,000 acres designated 1,100 plots allotted First phase: 1,000 acres | Polymer zone: 500-800 acres Petrochemical cluster | $1.5-2.5B infrastructure |
| Aramco Refinery (Planned) | $10B project 250,000-300,000 bpd capacity $1B petrochemical complex | Synergy with TAPI polymers Polyethylene + polypropylene | Complementary investment |
| Power Supply | 300 MW coal plant (planned) 100 MW from Iran | Additional 200-300 MW needed | $300-500M |
| Water (Desalination) | 5 million gallon/day plant | Polymer complex needs 10-15 MGD | $200-300M expansion |
| Makran Coastal Highway | Operational to Karachi | Enhanced for industrial traffic | $200-300M upgrades |
| Railway Connection | Under consideration | Critical for bulk transport | $2-3 billion |
| Storage Facilities | Limited | Polymer storage + loading | $500M-800M |
| Export Processing Zone | Planned 2,292 acres (CPEC) | Polymer manufacturing priority | Tax incentives ready |
Current Advantages:
- Aramco planning $10 billion oil refinery with $1 billion petrochemical complex producing polyethylene and polypropylene at Gwadar
- 3,000 acres reserved for Gwadar Industrial Estate with 1,100 plots allotted to industrialists
- Gwadar declared winter capital of Balochistan (April 2021), signaling government priority
- Strategic location: 533 km from Karachi, 380 km from Oman, near Persian Gulf shipping lanes
Table 8: Central Asian Regional Joint Venture Opportunities
Turkmenistan-Kazakhstan-Uzbekistan-Pakistan Polymer Partnership Model
| Country | Current Petrochemical Capacity | Joint Venture Potential | Mutual Benefits | Investment Track Record |
| Turkmenistan | Kiyanly Complex: 380,000 MT PE/year 80,000 MT PP/year Operational since 2018 | Technology partner Feedstock supplier Equity investor (20-30%) | Gas supply security Market access via Gwadar Diversification | $3.4B invested in Kiyanly TAPI originator |
| Kazakhstan | Diversified economy Active in petrochemicals Potash & chemicals | Financial partner Regional market access Equity investor (15-20%) | Access to Arabian Sea port Export routes to Middle East/Africa Technology partnerships | Strong Chinese JV experience BRI participant |
| Uzbekistan | Uz-Kor Gas Chemical: $4B complex Surgil Natural Gas Chemicals $5B methanol-olefins (under construction) $1.8B Shurtan expansion | Operating partner Technical expertise Equity investor (15-20%) | Export diversification Technology sharing Regional integration | ADB: $125M loan + $275M guarantee Korean JV success |
| Pakistan | Limited polymer production Large import market Gwadar infrastructure | Host country Market provider Majority stake (40-50%) | Value-added gas utilization Import substitution Export earnings | Saudi Aramco partnership CPEC infrastructure |
Sources:
- Turkmenistan’s $3.4 billion Kiyanly gas-chemical complex processes 5 billion m³ gas into 380,000 tons polyethylene and 80,000 tons polypropylene annually since 2018
- Uzbekistan constructing $5 billion methanol-to-olefins complex in Bukhara, plus $1.8 billion Shurtan expansion
- Uz-Kor Gas Chemical $4 billion plant (Uzbekistan-Korea JV) operational since 2016 with ADB financing
Table 9: Proposed Joint Venture Structure for Gwadar Polymer Complex
| Element | Specification | Rationale |
| Total Project Cost | $7 billion | Integrated PE + PP complex (1.6 MT/year) |
| Equity Structure | Pakistan: 45% Turkmenistan: 25% Uzbekistan: 15% Kazakhstan: 10% Technology Partner: 5% | Host country majority Regional cooperation Technology access |
| Debt Financing | $3.5 billion (50%) | ADB, IsDB, Chinese policy banks, commercial |
| Gas Supply Agreement | TAPI: 500 MMCFD fixed allocation Price: $10-11/MMBTU Term: 25 years | Long-term price certainty |
| Technology Provider | LyondellBasell, Borouge, or Sinopec | World-class technology Operational expertise Market access |
| Offtake Agreement | 50% export (Middle East, Africa, Europe via Gwadar) 50% regional (Pakistan, Afghanistan, Central Asia) | Market diversification Revenue security |
| Management | Professional management Board: 9 members (Pakistan 4, others 5) | Transparent governance Commercial operation |
| Tax Structure | 15-year tax holiday (Gwadar EPZ) 0% import duty on equipment 100% profit repatriation | Pakistan investment incentives |
| Employment | 60% Pakistani nationals 40% regional/international | Skills transfer<br>Local development |
Precedents:
- Uz-Kor Gas Chemical (Uzbekistan-Korea): Successful $4B JV operating since 2016
- Aramco-Pakistan Refinery: $10B planned JV demonstrates model viability
- Central Asia-China gas pipelines: Proven cooperation model
Table 10: Comparative Analysis – TAP vs. TAPI Economics (2030-2045)
| Scenario | Pakistan Gas Volume | Afghanistan Gas Volume | Annual Gas Cost | Transit Revenue | Total Economic Impact | Net Benefit vs. TAPI |
| TAPI (With India) | 1,325 MMCFD | 500 MMCFD | $7.9-8.7B | $700-800M | +$700-800M | Baseline |
| TAP Scenario 1: Equal Split | 1,662 MMCFD<br>(+25%) | 663 MMCFD<br>(+33%) | $9.9-10.9B | $0 | Additional 337 MMCFD | +$600-800M/year |
| TAP Scenario 2: Pakistan Priority | 1,825 MMCFD (+38%) | 500 MMCFD (unchanged) | $10.9-12.0B | $0 | Additional 500 MMCFD | +$900M-1.2B/year |
| TAP Scenario 3: Afghanistan Growth | 1,525 MMCFD (+15%) | 800 MMCFD (+60%) | $9.1-10.0B | $0 | Additional 200 MMCFD | +$400-600M/year |
Analysis:
- Lost Transit Revenue: -$700-800M annually without India
- Gained Gas Volume: +200-500 MMCFD depending on Afghanistan’s allocation
- Value-Added Processing: Polymer production generates $650M+ annual profit (500 MMCFD input)
- Net Economic Impact: TAP can be equally or more beneficial than TAPI if gas is used for value-addition
Critical Finding: Without India, Pakistan can actually benefit MORE economically by:
- Taking 200-500 MMCFD additional gas allocation
- Processing it into polymers ($3-5B revenue vs. $700-800M transit fees)
- Developing Gwadar as a petrochemical hub
- Creating 20,000+ direct/indirect jobs
Table 11: Risk Mitigation – TAP vs. TAPI Scenarios
| Risk Factor | TAPI (With India) | TAP (Without India) | Mitigation Strategy |
| Project Viability | Higher (India shares costs) | Lower but manageable | Afghanistan + Pakistan share costs Shorter pipeline = lower costs |
| Transit Revenue | $700-800M annually | $0 | Offset by polymer profits Additional gas allocation |
| Afghanistan Security | Same risk | Same risk | International guarantees Multi-country insurance UN/SCO involvement |
| Gas Demand Risk | Distributed across 3 countries | Concentrated in 2 countries | Value-added uses (polymers) Afghanistan industrial growth |
| Financing | Easier (India participation) | More challenging | Central Asian partners Chinese/ADB/IsDB support Smaller CAPEX (shorter route) |
| Geopolitical | India-Pakistan tensions | Reduced tensions | Regional cooperation model Afghanistan reconstruction focus |
Strategic Advantages of TAP:
- Simpler Governance: 2 countries vs. 4 countries
- Shorter Pipeline: 826 km (Pakistan) + 774 km (Afghanistan) = 1,600 km vs. 1,814 km
- Lower CAPEX: ~$6-7 billion vs. $10 billion (estimated)
- Stronger Bilateral Ties: Pakistan-Afghanistan cooperation reinforced
- No India-Pakistan Political Risk: Major uncertainty removed
Table 12: Afghanistan’s Justification for Higher Gas Allocation (Without India)
| Sector Development | Gas Need by 2035 | Justification | Economic Impact |
| Power Generation | 120-150 MMCFD | Electrification rate: 35% → 70% Population 45M+ | $2-3B infrastructure investment |
| Fertilizer Industry | 100-120 MMCFD | Food security Agriculture 44% of economy Export potential | $1.5-2B annual production |
| Cement & Construction | 25-30 MMCFD | Urbanization accelerating Infrastructure rebuild Population growth 2.1%/year | $5-8B construction boom |
| Industrial Manufacturing | 30-40 MMCFD | Import substitution Employment generation Chinese investment interest | $3-5B industrial output |
| Mining & Heavy Industry | 20-30 MMCFD | Copper (Aynak), lithium, rare earths Chinese partnerships | $10-15B potential revenues |
| Petrochemicals (new) | 50-70 MMCFD | Joint ventures with Pakistan Value addition strategy | $1-2B annual revenue |
| CNG & Transport | 20-25 MMCFD | Modernizing vehicle fleet Reduce diesel imports | $500M-1B import savings |
| Residential/Commercial | 40-50 MMCFD | Urban gas networks Rising living standards | Social development |
| TOTAL JUSTIFIED NEED | 405-515 MMCFD | Conservative estimates | $25-40B economic transformation |
| Reasonable Allocation | 700-800 MMCFD | Includes growth buffer | Sustainable for 15-20 years |
Conclusion: Afghanistan can justify consuming 700-800 MMCFD by 2035, which is 50-60% more than its current 500 MMCFD allocation. This leaves 1,525-1,625 MMCFD for Pakistan – still more than the original 1,325 MMCFD allocation.
Table 13: Pakistan’s Complete Gas Supply Portfolio (2030-2040) – With TAP
| Supply Source | 2030 | 2035 | 2040 | Cost ($/MMBTU) | Security Rating |
| Domestic Production | 2,476 MMCFD | 1,916 MMCFD | 1,482 MMCFD | $4-6 | Declining |
| LNG (Long-term) | 1,200 MMCFD | 1,200 MMCFD | 1,200 MMCFD | $10-13 | Medium |
| LNG (Spot) | 700 MMCFD | 700 MMCFD | 700 MMCFD | $8-20 | Low (volatile) |
| TAPI/TAP Gas | 1,525-1,625 MMCFD | 1,525-1,625 MMCFD | 1,525-1,625 MMCFD | $10-11 | High |
| Iran Pipeline (potential) | 0 MMCFD | 750 MMCFD | 750 MMCFD | $8-9.50 | Medium (sanctions) |
| TOTAL SUPPLY | 5,901-6,001 MMCFD | 6,091-6,191 MMCFD | 5,657-5,757 MMCFD | Blended | Diversified |
| Total Demand | 4,890 MMCFD | 4,925 MMCFD | 4,950 MMCFD | ||
| SURPLUS | +1,011-1,111 MMCFD | +1,166-1,266 MMCFD | +707-807 MMCFD | Energy security |
Strategic Outcome: With TAP, Pakistan achieves complete energy security with surplus capacity for:
- Industrial expansion
- Value-added processing (polymers, fertilizers, chemicals)
- Regional gas trading hub
- Export of processed products
Table 14: Summary – Why TAPI Works Without India
| Criterion | Assessment | Supporting Evidence |
| Afghanistan Can Absorb More Gas | ✓ YES | 5-7x demand growth by 2040 Industrial recovery accelerating Can justify 700-800 MMCFD by 2035 |
| Pakistan Has Profitable Uses | ✓ YES | Polymer production: $650M+ annual profit High-value consumers ready Import substitution opportunity |
| Economics Without Transit Revenue | ✓ POSITIVE | Value-added processing > transit fees Polymer profits: $650M vs. transit: $700-800M<br>Additional gas allocation compensates |
| Regional Partnerships Viable | ✓ YES | Turkmenistan, Kazakhstan, Uzbekistan active in petrochemicals Proven JV models exist BRI/CPEC alignment |
| Infrastructure Feasible | ✓ YES | Gwadar Industrial Estate ready Aramco refinery planned CPEC infrastructure support |
| Market Demand Strong | ✓ YES | Global polymer market: 4-5% CAGR Asia-Pacific: 50% market share Pakistan imports $2B+ polymers annually |
| Financing Available | ✓ YES | ADB, IsDB, Chinese banks Central Asian equity partners Lower CAPEX than TAPI |
| Geopolitical Advantage | ✓ YES | Removes India-Pakistan tensions Strengthens Afghanistan ties Simplifies governance |
| Timeline Acceptable | ✓ YES | TAP: 4-5 years vs. TAPI: 6-8 years Faster to execute Earlier returns |
| Overall Viability | STRONGLY POSITIVE | TAP economically justified May be preferable to TAPI in some scenarios |
There is no doubt that TAP can be more profitable than TAPI. By creating these scenarios, we are not advocating for India to opt out of TAPI. The idea is to only point out the inherent potential.
In the next part, we will go deeper in search of more possibilities. /// nCa, 1 December 2025 (to be continued . . .)