A Quick Look at the Economic Value of Toti Maidan Gas

 

By: Qais Ahmad

Introduction

From the perspective of economics, foreign investment is considered one of the fundamental needs for economic growth in countries like Afghanistan. The reason is that the necessary resources and advanced technology for economic development are not available within the country. However, the advantage lies in the fact that there are existing opportunities for investment to fill this gap.

The Islamic Emirate has recognized the need for foreign investment and, in response, has assured all investors, especially foreign ones, of full cooperation and support. It has identified all potential investment opportunities, making the process easy and transparent.

As a result of these facilitative measures, the level of foreign investment in Afghanistan has increased recently. A prime example of this is the recent $1 billion investment by an Uzbek company in the Toti Maidan gas fields in Faryab province. This investment is considered a significant step in the country’s economic growth, and we will briefly discuss its economic value.

Toti Maden Gas Reserves

Afghanistan is among the countries with abundant minerals and extensive underground natural resources, both regionally and globally. Gas is one of these resources, discovered in various parts of the country, with total reserves estimated between 100 to 500 billion cubic meters. The Toti Maidan gas reserves in Faryab province were identified years ago by foreign experts, but practical exploration and extraction had not begun due to continuous wars, occupation, and insecurity in the country.

With the rise of the Islamic Emirate to power and the establishment of nationwide security, an unprecedented opportunity was created to extract various minerals and underground resources, including the Toti Maidan gas reserves. Taking advantage of this opportunity, the Islamic Emirate signed an exploration and extraction agreement for the Toti Maidan gas with an Uzbek company, in line with foreign investment principles. This contract spans 10 years, extendable to 25 years. According to the contract, the company will invest $100 million in the first year and a total of $1 billion over 10 years, while also establishing a 100-megawatt gas power plant within the first two years. In the first three years, the company will conduct a 2D survey over 1,500 square kilometers and a 3D survey over 1,000 square kilometers.

The Toti Maidan gas reserves are located in Faryab province, covering an area of approximately 7,000 square kilometers. It is estimated that the region holds around 30 billion cubic meters of gas, which, once extraction begins, will significantly meet the gas needs of the Afghan people.

Economic Value of the Toti Maidan Gas

Afghanistan imports its required gas from countries like Turkmenistan, Iran, Kyrgyzstan, Russia, and Tajikistan, with annual imports costing hundreds of millions of dollars. According to the Ministry of Industry and Commerce, from January to September of the current year, Afghanistan imported over 734,000 tons of gas. As the cold winter season approaches, the demand for gas increases significantly.

These gas imports often face issues, particularly during winter when many trade routes are covered in snow, leading to delays and steep price hikes, making gas unaffordable for many. This is while vast underground reserves of hundreds of billions of cubic meters of gas remain untapped within the country.

To address this issue, the Islamic Emirate has initiated efforts to extract gas from domestic sources, exemplified by the exploration and extraction of the Toti Maidan gas reserves. This initiative is a significant step toward the development and strengthening of the energy sector, which will bring Afghanistan closer to self-sufficiency in a critical area.

Afghanistan has an imbalanced trade balance, with imports outweighing exports, largely due to limited domestic production. The commencement of the extraction of these gas reserves will increase the overall gas production within the country, meeting local needs at a reasonable and affordable price.

The exploration and extraction of these reserves will not only prevent the outflow of capital from the country but also attract significant foreign investment, amounting to $1 billion. This investment will introduce advanced technology, provide Afghan workers with valuable experience in gas exploration and extraction, and eventually enable them to manage this vital sector independently.

Attracting such large-scale foreign investment will also encourage other investors to take advantage of the emerging opportunities in Afghanistan. The most significant benefit of attracting foreign investment is that it will strengthen Afghanistan’s economic credibility in the region.

This investment will trigger developmental projects in Faryab province, including the construction of roads to access the gas fields, processing plants, laboratories, and large-scale storage facilities. A major market for gas trade will emerge, transforming the province into a commercial hub.

With the extraction of Toti Maidan gas, Afghanistan’s gas market will stabilize, shifting from reliance on imports to a steady supply, which will positively impact overall trade and contribute to the country’s economic growth.

In addition to gas exploration and extraction, the contracted company will build a 100-megawatt gas power plant in the province. This is a major step forward for an underdeveloped province. Industrial parks will be established, and significant investment will be attracted through the generated electricity, promoting industrial growth.

The people of Faryab, who largely rely on agriculture and livestock, will benefit from the establishment of standardized centers for packaging agricultural products and processing dairy goods, helping farmers and herders sell their products more efficiently.

The power plant will also bring electricity to many areas in Faryab province currently without power. Government offices, educational institutions, and most importantly, hospitals in the provincial capital and districts will have a steady electricity supply, ensuring timely and improved services for the people.

The start of Toti Maidan gas exploration and extraction by the Uzbek company will create thousands of direct and indirect job opportunities, positively affecting the standard of living for many.

Conclusion

The initiation of the exploration and extraction of Toti Maidan gas is considered a significant step in the growth and strengthening of Afghanistan’s energy sector, bringing the country closer to self-sufficiency in a key area. This will meet Afghanistan’s gas needs at an affordable price and create thousands of job opportunities within the country.

The $1 billion investment in these gas reserves will not only introduce advanced technology but also play a crucial role in attracting further foreign investment. The construction of a 100-megawatt gas power plant in this area will stimulate industrial growth and expand trade in Faryab province.

Residents of this underdeveloped province will benefit from a stable electricity supply, alongside the development of infrastructure and progress in various sectors.