Pakistan and the three other participating countries are finalising tender documents for the TAPI pipeline in consultation with the Asian Development Bank that is playing the role of transaction adviser. PHOTO: FILE
In a strategic move, China has shelved a plan to be part of the Iran-Pakistan (IP) gas pipeline that faces the threat of US sanctions and has come up with an offer to join the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline to meet its growing energy needs.
According to sources, Beijing plans to lay a pipeline under the TAPI project from Gwadar to China, which will turn Gwadar Port into an energy corridor.
Bangladesh has already approached Turkmenistan, which will export gas from its vast reserves, and other countries that are part of the project, seeking to be part of the TAPI pipeline to meet its energy needs.
“Once Turkmenistan and US gas companies finalise a deal for exploration rights, China and Bangladesh will formally engage in talks to participate in the venture,” an official said.
Already, China has taken over operational control of Gwadar Port where it will establish an industrial city.
Earlier, the official added, China had expressed interest in becoming a member of the IP project, but changed its stance later as the future of the venture looked uncertain in the face of influence from a Gulf Arab country and threat of US sanctions.
Pakistan and the three other participating countries are finalising tender documents for the TAPI pipeline in consultation with the Asian Development Bank that is playing the role of transaction adviser.
However, officials said progress had been very slow because of some unresolved issues between Turkmenistan and US companies including Chevron and ExxonMobil. Only that company will get the contract for laying the gas pipeline that has gas extraction contracts in Turkmenistan.
Turkmenistan does not offer exploration rights to foreign companies for its onshore fields. However, it has offered offshore exploration rights to Chevron and ExxonMobil, which could enter into swap arrangements for onshore fields.
“This process is yet to be finalised. It could be expedited when the petroleum minister of Pakistan and delegations of Afghanistan and India visit Turkmenistan in the second week of May to attend an energy conference where they will hold meetings on the sidelines,” the official said.
The two US firms have been shortlisted, which will be given tender documents for vying for the pipeline contract.
According to officials, the four countries linked with the TAPI project are in the process of setting up a consortium and selecting a technically capable and financially sound company as consortium leader, which will design, finance, construct, own and operate the gas pipeline.
Chevron, a renowned oil and gas company with vast experience in the energy sector including gas pipelines, is one of the potential consortium leaders. Indian and Afghan officials had already met a representative of Chevron in Delhi to discuss the company’s potential role in the project as a consortium leader.
Chevron had also approached Pakistan, insisting it was keen to undertake work on the pipeline and there was a strong possibility that the company would be selected as the consortium leader to finance, design and build the pipeline.
Under the TAPI project, Pakistan will get 1.365 billion cubic feet of gas per day (bcfd) from Turkmenistan, India will also receive the same 1.365 bcfd and Afghanistan will get 0.5 bcfd.
Turkmenistan will export natural gas through a 1,800km pipeline that will reach India after passing through Afghanistan and Pakistan.
Pakistan and India have already signed gas sale and purchase agreements and efforts are under way to attract potential investors for financing the project.
Published in The Express Tribune, April 30th, 2014.
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COMMENTS (18)
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@gp65: TAPI would have to go south to reach India
Sorry, but you are wrong. Hari Om has got the route right, it goes via the North East. There is also a southern spur for entry via Jaisalmer. However even that is nowhere near Gwadar.
@Strategic Asset:
"Whoever wrote this should first locate Turkmenistan on a map. Why would you pipe gas all the way south to Gwadar and then all the way north through the so-called “Energy corridor” to China?"
I too wondered the same. Also, what is the need for Bangladesh to connect to the TAPI pipeline when they can directly sell to India and China through an eastern pipeline? It looks like whoever wrote this article should have either been totally confused or smoked something very strong.
So much for the myth that China doesn't care about US sanctions. Fact is, the US is the 500-pound gorilla in terms of financial clout. China and other emerging economies can have trillions of dollars of surpluses but they will always depend on the US for their fortunes.
Either exclude P from TAPI or you will see a exclusion of I . India won't feed terrorists for sure . Capture POK and construct TAI.
@POLPOT 30 Billion USD it won't be feasible and plus CHINA and INDIA I highly doubt it with MODI in power. TAPI is being backed by US and that is it
@Strategic Asset: Thank heaven you made the point SA. I was beginning to get disoriented, trying to imagine what changes in regional geography could have taken place since I last looked.
Why on earth would the TAPI pipeline go all the way down south to Gawadar? There are shorter overland routes to connect all the countries involved in this project.
@Hari Om: 'Next one will be hearing in the Pakistani media that India will be investing"" +++++++++++++++++++++++++++++++++++++++++++ Remember stories in the Tribune Express that an Iranian Company was interested in investing about USD1 Bn for the Pakistani half of the IP? That company and the report seem to have disappaeared along with the MH 370.
Next one will be hearing in the Pakistani media that India will be investing in an LNG regasification plant at Gwadar to regasify LNG purchased at the Sabine Pass and Cove Point facilities in the US with the regasified LNG then transported by an Indian financed pipeline starting at Gwadar onward to India.
@Strategic Asset.
Your are spot on in saying that whoever wrote this should have first located Turkmenistan on the map. China is in a Northerly / North Easterly direction from Turkmenistan while Pakistan is in a South Easterly direction. Then the Pakistani leg of TAPI is slated to run in an easterly direction along the Quetta – Multan – Fazlika axis to the Indian border. It would be dumb for China to build a spur line turning away from China to Gwadar and then retracing its route back in the direction it came from to get to China.
Seems that elements in Pakistan have fallen prey to visions of easy money by means of raking in a toll through acting as a thekedar leading to common sense being blinded in Pakistan.
Whoever wrote this should first locate Turkmenistan on a map. Why would you pipe gas all the way south to Gwadar and then all the way north through the so-called "Energy corridor" to China?
@Warsi...because of Iran role in Syria.
Why is everyone against Iran?
Russia and India are planning a 30 Billion USD pipeline through Xinjiang to India. China is evidently in favor of it. Not sure how much of an interest China has in TAPI.
"Gas import: China abandons IP project, eyes TAPI pipeline" ++++++++++++++++++++++++++++ How can China abandon a non existant project? China should be made to pay 3 Mn per day penalty that Pakistan has to poay from 1st Jan 2015 to Teran. And what sweeter than honey and higher than himalays....
" Gas import: China abandons IP project, eyes TAPI pipeline" ++++++++++++++++++++++++++++++++++ My compliments to the author: wisely he has not even mentioned a target date for start of the TAPI.:).
Pakistan should make it beneficial for itself, in Canada the landlocked ALberta reserves of oil and gas (tarsands/oilsands) benefits not just Alberta but also British Columbia where the pipe has to pass (under the enbridge project) to reach asian markets