TAPI gas deal likely by end of July

No deliberations held on price.

NEW DEHLI:

The governments of Turkmenistan, Afghanistan, Pakistan and India are aiming to sign by July 31 a United States-backed deal to purchase gas worth billions of dollars from Turkmen reserves, a statement said on Thursday.

Indian Oil Minister S Jaipal Reddy said the pipeline, which is estimated to cost $7.6 billion, was expected to be completed by 2016 but added pricing had yet to be discussed. “No deliberation on price was held at this stage because it is a bilateral issue,” Reddy said.

The Turkmenistan, Afghanistan, Pakistan and India (TAPI) pipeline would transport gas over Afghan soil to consumers in India and Pakistan. But building the pipeline through some of Afghanistan’s most volatile regions presents a major challenge, adding to the project’s other hurdles such as gas pricing and transit fees.

Parts of the 735-kilometre Afghan stretch will be buried underground as a precaution against attacks and local communities will be paid to guard it, Afghan Mines Minister Wahidullah Shahrani said in September.

Financing will also be the key. Turkmenistan has previously estimated the cost of the project at $3.3 billion, although various estimates have put costs as high as $10 billion. The project is backed by the Manila-based Asian Development Bank.

An Indian official said partner countries had whittled down their differences and only a few issues such as gas pricing and transit fees remained to be resolved.

India and Pakistan have expressed interest in buying up to 70 billion cubic metres (bcm) annually and the pipeline’s capacity could be expanded.

Published in The Express Tribune, April 29^th, 2011.