TAPI gas pipeline: Turkmenistan in talks with Siemens for purchase of compressors

Compared to US firms, the German company offers better price and quality

ISLAMABAD: After the exit of US companies from the race, German firm Siemens is in the lead in competition for providing compressors for the Turkmenistan-Afghanistan-Pakistan-India (Tapi) gas pipeline project, say officials.

“Tapi Company has the mandate to lay the gas pipeline and Turkmenistan had earlier reached an advanced stage of negotiations with US companies including General Electric,” an official said, adding “but prices quoted by these companies were on the higher side and the quality was not too good.”



“Turkmenistan is now in negotiations with German firm Siemens. Its price offer and quality both are good.”

According to officials, Tapi Company has been set up by the project stakeholders and Pakistan has a 5% stake in it while Turkmenistan has 85% shareholding.

The company is responsible for arranging funds and laying the pipeline. Road shows have also been organised to raise financing.

They said Turkmenistan would do everything under the umbrella of Tapi Company including the selection of a contractor to build the pipeline. Pakistan will only pay a fee (toll) for the transport of gas through the pipeline.

Pakistan has not been made part of the process, however, it has been informed that Turkmenistan is discussing a deal with Chinese companies for building the pipeline.

The Chinese companies will bring bank financing as part of the contract. Although Turkmenistan is working with different companies including Chinese firms, no selection has been made yet. It is likely that a Chinese company will get the engineering, procurement and construction (EPC) contract.



Earlier, Bangladesh and China had expressed interest in becoming part of the Tapi pipeline project. The US also wanted to see Bangladesh become part of the pipeline since the project will work as an energy corridor between different countries and the US wanted to connect with Bangladesh along with India and Afghanistan.

Since China and Bangladesh were distant countries, therefore the pipeline would not be feasible for them, the officials said, adding they should opt for LNG imports as an immediate solution.

Published in The Express Tribune, June 23^rd, 2016.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.