A leading energy consultancy, Wood Mackenzie, has advised Pakistan to postpone its commitment to the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project until at least 2031, citing a domestic surplus of imported liquefied natural gas (LNG).

Wood Mackenzie's recommendation has prompted urgent discussions within the country’s Petroleum Division, with officials now weighing the options of either delaying or potentially withdrawing from the $13 billion project entirely, a senior official from the Ministry of Energy told reporters on Friday.

Pakistan's domestic gas consumption has seen a sharp decline, leading to an oversupply of imported LNG. This existing surplus, combined with challenges in managing current LNG contracts, makes a new long-term commitment to the TAPI pipeline financially risky.

The advisory also comes as Pakistan reevaluates the project in light of India's continued indecision. Senior officials believe that if India withdraws, the pipeline would become the TAP, a model considered economically unviable for Pakistan. 

Without India's participation, Pakistan would lose an estimated $700–800 million in annual transit fees, while also having to pay Afghanistan $500 million a year for gas transit.

Factoring in the base gas price of $7.5 per MMBTU, the total cost would surpass even the price of expensive re-gasified LNG imports, making the project financially unsustainable for Pakistan.

Earlier this year, Pakistan and Turkmenistan reaffirmed their commitment to the TAPI gas pipeline project, hailing it as a transformative initiative with the potential to spur regional economic growth. 

However, with the Mackenzies' recommendation, it’s not yet clear whether the government would opt for a 5-year pause or withdraw from the project.