$10b TAPI pipeline: PM likely to meet Modi at groundbreaking ceremony

Project called major initiative that will bring peace in region


Zafar Bhutta December 09, 2015
PHOTO: AFP

ISLAMABAD:


Prime Minister Nawaz Sharif is likely to meet his Indian counterpart Narendra Modi and Afghan President Ashraf Ghani in Ashgabat, Turkmenistan on the sidelines of a groundbreaking ceremony on December 13 of a $10-billion pipeline that will supply gas to Afghanistan, Pakistan and India.


The pipeline called Tapi, which will bring gas from energy-rich Turkmenistan, is dubbed as a major initiative that will bring peace in the region by connecting South Asia with Central Asia and Europe.

According to officials aware of the development, Prime Minister Sharif will leave for Turkmenistan on December 12 and the Indian premier is also expected to attend the event.

Turkmenistan begins work on TAPI pipeline

“The groundbreaking of the Tapi pipeline project will be a significant milestone for Pakistan and other countries associated with it,” commented Inter State Gas Systems (ISGS) Managing Director Mobin Saulat while talking to The Express Tribune.

“We are currently working on three pipelines which include a liquefied natural gas (LNG) pipeline from Gwadar, Tapi and North-South LNG pipeline,” he said.

China and Russia are providing funds for the Gwadar pipeline and an LNG terminal, and the North-South pipeline respectively. Turkmenistan is financing the Tapi project.

According to an official, Russia has also offered to lay a pipeline for gas export and the Tapi project will provide an opportunity to lay a parallel pipeline through this route.

Apart from this, Pakistan and Russia have signed a government-to-government deal to build a $2-billion LNG pipeline from Karachi to Lahore.

Officials say Turkmenistan has promised 85% of investment in the Tapi project and the remaining equity will be equally shared by Afghanistan, Pakistan and India.

“The cost of two pipelines - LNG Gwadar including the terminal and Tapi - stands at $12 billion,” Saulat said, adding Pakistan would have to contribute only $500 million to execute the projects.

Pakistan will import 1.3 billion cubic feet of gas per day (bcfd) from Turkmenistan whereas 600 million cubic feet of LNG per day (mmcfd) will be imported through the LNG terminal at Gwadar. “The country will be able to bridge the shortfall through these two projects,” he said.

Talking about the long-stalled Iran-Pakistan gas pipeline project, Saulat said Pakistan would be able to purchase 1 bcfd through this scheme, which would also be linked with the Gwadar pipeline.

Capital spending by ISGS is less than 2% of total revenues generated by gas distribution companies - Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL).

However, ISGS will become the country’s largest pipeline assets company after implementing these projects.

Consultants have finished work on the design, feasibility and security studies of the Tapi pipeline.

“After the groundbreaking on December 13, financial close will be achieved in one year and the pipeline will be built by the end of 2019,” an official said.

He was of the view that there would be no wastage of gas through the regional pipelines and consumers would not have to bear the 17.5% guaranteed rate of return on assets being received by the gas distribution companies.

Turkmenistan begins work on TAPI pipeline

The pipeline projects will also turn Gwadar Port into a trading hub. The Gwadar Development Authority has placed a request for 100 mmcfd of gas to meet the city’s needs and set up power plants. It will also fulfill requirements of industrial units at Gwadar Port.

Published in The Express Tribune, December 9th, 2015.

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COMMENTS (19)

Usman | 6 years ago | Reply These are huge projects and would take time to materialize.One thing we could conclude from these kind of news is that Pakistan is going in the right direction and these projects would be a dawn of new era for Pakistan InshAllah
Munir Basha | 6 years ago | Reply @Khan: - TAPI pipeline is a tactic plan by India to make Pakistan to de-link with Arab countries and dependency which in turn benefit India cos those countries turn to India for economic and cultural relation. All big and developed countries like China, Russia, Japan, US, France, Germany, UK are all interested in India.
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