Negotiations begin to revive TAPI project

Pakistan wants gas delivery point moved to Pak-Afghan border.

ISLAMABAD:

Pakistan and Turkmenistan have begun talks to revive the Turkmenistan-Afghanistan-Pakistan and India (TAPI) gas pipeline project which has been stalled due to differences over price review and the delivery point.

So far, the gas delivery point of the TAPI pipeline project remained a sticking point, because of which the two countries delayed the signing of the shareholding agreement. As per original deal, Pakistan, Afghanistan and India would have a total of 15% shares, while Turkmenistan would have 85%.

Under the existing gas sale-purchase agreement, the gas delivery point is the Afghanistan-Turkmenistan border. However, Pakistan wanted the delivery point moved to the Pakistan-Afghanistan border.

Pakistani side believes that the price review was not a major issue because the TAPI price ranged between $6 and $7 per mmbtu, whereas Pakistan imported liquefied natural gas (LNG) at $12 per mmbtu on spot-purchase basis.

Officials said that after the takeover of Afghan Taliban, the chances of executing the LNG pipeline projects had brightened. They added that since there was no central government in Afghanistan earlier, therefore, there were issues in executing the TAPI pipeline project.

The officials further said that there was a central government of Afghan Taliban in Kabul now. Therefore, it would make the TAPI project feasible for all countries, adding that the Afghan Taliban had already assured Turkmenistan that they would back the TAPI pipeline project.

Pakistan is currently increasing the share of LNG in national grid from the current 24%. At present, there are two LNG terminals with 1.2 billion cubic feet per day (bcfd) handling capacity, while two more terminals with 1.2 bcfd handling capacity are in the pipeline. After operationalisation of the two more terminals, the LNG share will rise to 48%.

Different countries use LNG as interim arrangement and its share goes up to 6%, whereas in Pakistan its share is increasing. In recent months, Pakistan faced gas crisis due to dependence on the LNG imports.

Now, Pakistan wants to diversify imports and TAPI pipeline was one of them.

This situation also calls for revising gas price under the TAPI project by Turkmenistan and officials said that Pakistan had already taken up the matter with the central Asian country. However, Ashgabat expressed reluctance, saying that it would have to revise prices for other partners, India and Afghanistan, also.
Turkmenistan had also agreements with other countries, who could also seek revision of gas prices if it agrees to cut TAPI gas prices. Further, Turkmenistan does not agree with claims of Pakistan that LNG is cheaper compared to price of TAPI project.

To resolve these issues, Pakistan and Turkmenistan formed a working group, which held its first virtual meeting in December 2021. Now, it will meet again to deliberate further on these issues.

According to a statement, a high level delegation of Turkmenistan, led by Deputy Foreign Minister Vepa Hajiyev held extensive talks with a Pakistani delegation, led by Energy Minister Hammad Azhar, here. Both sides discussed various aspects of the pipeline project.

The Turkmenistan-Afghanistan-Pakistan (TAP) power transmission line also came under discussion. During the meeting, Azhar reiterated Pakistan’s commitment to TAPI project and stressed the need for expediting the scheme. Turkmenistan also reiterated its commitment to the project.

Azhar further expressed the resolve of the government of Pakistan for early completion of the TAPI project on account of Pakistan’s need for additional supplies of natural gas. He requested the Turkmenistan side to take all steps for the early completion of the project.

Read: "Taliban vow to protect TAPI gas pipeline project in Afghanistan"

Pakistan agreed to hold the meeting of the technical working group on Turkmenistan-Afghanistan-Pakistan (TAP) power transmission line in a week that will work around the pre-feasibility parameters of the project.
It was decided that a meeting of the technical working group on TAPI would be held on Tuesday (today) to propose the future roadmap given the changed dynamics of the project.

The Turkmen delegation included TAPI Pipeline Company chief Muhammetmyrat Amanov; Head of the Department of International Power Projects, M Artykov; Ambassador of Turkmenistan to Pakistan Atadjan Movlamov; Chairman of the Turkmenenergogurlushyk N Atayev and others

The Pakistan’s delegation included Power Division Secretary Syed Asif Haider Shah, Petroleum Division Secretary Ali Raza Bhutta and senior officials of the Energy Ministry.