TAPI gas pipeline finalised
25 April, 2008
ISLAMABAD: The 10th steering committee of oil ministers from Turkmenistan, Afghanistan, Pakistan and India on Thursday agreed to start construction work on the much-delayed TAPI (Turkmenistan-Afghanistan-Pakistan-India) pipeline project in 2010.
This was stated at a joint press conference by Minister for Petroleum and Natural Resources Khwaja Muhammad Asif, Turkmen Minister for Oil and Gas Industry Dr Baymurad Hojamuhamedov, Afghan Minister of Mines Mohammad Ibrahim Adel and Indian Minister for Petroleum and Natural Gas Shri Murli Deora here after the conclusion of the steering committee meeting.
The second meeting of the technical working group (TWG) of the four countries was also held the same day. The gas pipeline project, to be completed at the cost of $7.6 billion, will start supplying 3.2 billion cubic feet gas per day through 56-inch diameter pipeline.
The pipeline will start from Dauletabad field in Turkmenistan to Fazilka at the Pakistan-India border, passing through Herat and Kandahar in Afghanistan and Multan in Pakistan. The project cost estimate was $3.3 billion in 2004, which has now been updated to $7.6 billion. The price increase was due to sharp increase in the price of steel, construction cost and the cost of compressor stations.
Key principles for future gas sales and purchase agreement will be agreed bilaterally between the buyer and sellers under the heads of agreement discussions. However, any issue that remains unresolved will be left for GSPA (Gas Sales Purchase Agreement), the The Turkmen side informed the meeting that it would submit before Sept 2008 whereas the gas specification would be supplied within one-month time, says the announcement. The Asian Development Bank (ADB) that is facilitating the talks will take up the issue for a comprehensive review of the feasibility study to move forward to the next phase of inviting investors’ interest in the project, the announcement added.
The parties have also agreed to form a consortium of investors to undertake a detailed feasibility study and further action, it said. The project would be completed to achieve first gas flow in 2015.
Khwaja Asif said all four countries were committed to finalise the project. He said despite significant increase in the project cost estimates, the project was still considered as economically and financially viable.
To a question, he said Turkmenistan would provide third party certification of reserves before the next meeting of the steering committee of ministers from four countries to be held in September/October this year in New Delhi.
He further said security issue would be sorted out once the project would start. To another question, he said the signatory countries were going ahead with the Iran-Pakistan-India (IPI) gas pipeline project and there was no question of pressure in this regard. He said he would discuss matters pertaining to the project today (Friday).
The Indian petroleum minister to a question said matters relating to transit fee of the IPI project with Pakistan would also be discussed in that meeting. Answering a question, the Indian petroleum secretary said construction work on the project would start in 2010 and gas supply would begin in 2015. Resident Director Asian Development Bank Peter Fidon said the project would lead to economic development and alleviation of poverty.