Concerned by the insurgency in Afghanistan, Islamabad has proposed a diversion from the original plan of a multi-billion dollar gas import project from Turkmenistan. Pakistan is seeking a swap of Turkmen gas with Iranian gas in order to eliminate the risk of sabotage to the pipeline in Afghanistan.
Pakistan officially put forth the proposal in a meeting of the Joint Ministerial Commission of Pakistan and Turkmenistan held here in Islamabad, said sources from the Petroleum Ministry.
The Pakistani delegation said that the proposal would allow the pipeline to be constructed and operated with lesser security risks.
Under the proposed arrangement, Iran would receive natural gas from Turkmenistan in its north and an equivalent quantity of Iranian gas would be delivered to Pakistan in the south through the ‘IGAT-7’ pipeline. It is estimated that the supply line has the capacity to take one billion cubic feet of additional gas under the Iran-Pakistan Gas Sale Purchase Agreement.
However, the swap fee is yet to be discussed.
The commission was jointly headed by Turkmenistan’s foreign minister and Pakistan’s Minister of State for Foreign Affairs Malik Emad Khan.
The Secretary of the petroleum ministry Kamran Lashari also added that it was too early to say what the revised cost of the project would be if the parties agreed to the swap proposal.
Turkmenistan would respond to Pakistan’s proposal at a later meeting of the technical working group and the steering committee group meetings, sources said.
The price of the Turkmen gas will be discussed during the meeting.
Sources said that the import of Turkmen gas under the swap arrangement was also discussed during a meeting with Iran in August 2009 during discussions on the Iran-Pakistan gas pipeline operation agreement.
Pakistan’s new initiative is divergent from the original Asian Development Bank (ADB) supported Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project.
The initial project aimed to bring natural gas from Dauletabad and adjacent gas fields in Turkmenistan to Afghanistan, Pakistan and India.
The estimated cost of the project is projected at $7.6 billion, which will take four to five years to conclude after all contracts are signed.
The ADB carried out a feasibility study in 2004 on the proposed route of the TAPI pipeline project. According to the study, the design capacity of the pipeline is 3.2 billion cubic feet of natural gas per annum. It proposed a pipeline starting from Turkmenistan, going through Herat and Kandahar in Afghanistan, crossing the Pakistan border near Chaman, passing Zhob, Dera Ghazi Khan and Multan districts before being routed onwards to Fazilka near the Indian border.
Pakistan has also suggested a change to this proposed route in case Turkmenistan does not accept the swap proposal. The alternate route passes through the relatively calm areas of Afghanistan.
Currently, Iran is importing 0.8 billion cubic feet of Turkmen gas through the Korpeje-Kurt-Kui pipeline from Korpeje gas field and another one billion cubic feet gas through Deuletabat-Sarakhs-Khangiran pipeline.
Concurrently, Pakistan is desperately looking towards Central Asia and Iran to meet its growing energy needs in the wake of fast depleting domestic reserves and growing energy demand.
The proposed second route would also provide Turkmenistan access to the fast growing South-East Asian market and the shortest pipeline route to the Arabian Sea for allowing prospective LNG importers to setup liquefaction plants.
Sources added that India was still indecisive about whether to become a stakeholder in TAPI or not. There is a chance that the other countries may decide to go ahead without India, similar to what Pakistan and Iran did in the case of a multi-billion dollar gas import project.
Published in The Express Tribune, August 25th, 2010.