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India, Pakistan make progress on TAPI gas pipeline project

26 January, 2012

NEW DELHI: India and Pakistan said on Wednesday they were closer to an agreement on a pipeline to import gas from Turkmenistan that would signal a further warming of economic ties between the traditional rivals.

Turkmenistan has the world's fourth-largest gas reserves and energy-hungry India and Pakistan are both eager to tap this source through the pipeline that would run through Afghanistan.

"There has been considerable progress in our talks," said Indian Oil Minister S Jaipal Reddy after a meeting in New Delhi with Minister for Petroleum and Natural Resources Asim Hussain.

The 1,700-kilometre TAPI pipeline aims to transport over 30 billion cubic metres of gas annually from the Dauletabad gas fields in southeast Turkmenistan.

"The issue of transit fees is being discussed with Afghanistan. A joint strategy is being evolved between India and Pakistan," Hussain said.

"Whatever deal we reach will apply to both countries," Reddy added.

Reddy said Pakistan would also consider a proposal to import Indian petroleum products and cited the savings in freight costs for Pakistan as several Indian refineries are located near the border.

Deepening economic engagement between the nuclear-armed neighbours is seen as crucial to lasting peace in the troubled South Asian region.

The Asian Development Bank estimated the cost of the TAPI pipeline in 2008 when the four countries signed a framework agreement at $7.6 billion.

Reddy said conflict-racked Afghanistan, which also desperately requires gas, was "very keen on the project" and had pledged security for the pipeline. The minister indicated that an earlier plan for a pipeline to carry gas from Iran to Pakistan and then India was now on the backburner.

"We do what is more easily possible," Reddy said, referring to the Turkmenistan project.

Washington, which has spearheaded sanctions against Iran over its nuclear programme, favours the TAPI pipeline and has pressured both India and Pakistan to hold off on a pipeline deal with Tehran.

End.

Reader Comments:

IP and TAPI

It is good sign that India finally believes that Pakistan is the only route or the major route of gas transport to India. Iran with 19 percent of the world's gas reserves(second only after Russia) is definitely the most convenient and Turkmanistan with 3-5 percent of the world's gas reserves is also the candidate agreed upon by India and Pak.

Since oil reached its peak on world scale, gas use has still some room left. Leave America and Russia aside ( Each will have 30-40 mbpd equiv total energy use by 2020), Pak and India will desperately need all the natural gas they can get. The energhy use equation stand as such:

For 1.18 billion population of India, energy use stands as:

1. Oil refining 3 mbpd
2. Gas 2 tcf per year or 1 mbpd equiv
3. Power 0.6 billion megawatt py or 1 mbpd equiv

India with total oil, gas and power use of 5 million barrels per day eqiovalent for 1.18 billion people

For 180 million Paks, the energu use equation stands as:

1. Oil refining 0.42 mbpd
2. Gas 1.4 tcfy or 0.7 mbpd equiv
3. Power 0.06 billion mega watt py or 0.1 mbpd equiv

Pakistan with combined oil, gas and power use of 1.22 million barrels per day equivalent for 180 million people.

Half trillion cubic feet per year gas each toIndia and Pakistan by TAPI and half tcfy gas to Pak through IP will boost Pak energy use to 2.22 mbpd equiv and India's to 5.5 mbpd equiv for seven times more Indians.

Iran, right now the world's third biggest gas producer(after America and Russia) and with 19 per cent of the world's gas reserves is very attractive choice with IP. Turkmanistan's TAPI is added bonus.

But, TAPI may have few un-resolved issues concerning the confirmation by some reliable world engineering companies. Second, China is already laying pipe line to take away 1.5 trillion cubic feet per year gas production out of its total 2 tcfy production a year. May be TAPI to India Pak may be half the anticipated size or quarter or 0.25 tcfy of TAPI.

Anwar Mahmood, Canada - 26 January, 2012

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