Turkmenistan has the world's fourth-largest gas reserves and energy-hungry India and Pakistan are both eager to tap this source through the pipeline that would run through the Central Asian nation's eastern neighbour, Afghanistan.
"There has been considerable progress in our talks," said Indian oil minister S. Jaipal Reddy after a meeting in New Delhi with his Pakistani counterpart, Asim Hussain, on energy cooperation.
The 1,700-kilometre (1,050-mile) TAPI pipeline, aims to transport over 30 billion cubic metres of gas annually from the Dauletabad gas fields in southeast Turkmenistan.
"The issue of transit fees is being discussed with Afghanistan. A joint strategy is being evolved between India and Pakistan," Hussain said.
"Whatever deal we reach will apply to both countries," Reddy added.
Reddy said Pakistan would also consider a proposal to import Indian petroleum products and cited the savings in freight costs for Pakistan as several Indian refineries are located near the border.
Deepening economic engagement between the nuclear-armed neighbours, which have fought three wars since independence from Britain in 1947, is seen as crucial to lasting peace in the troubled South Asian region.
The Asian Development Bank estimated the cost of the TAPI pipeline in 2008 when the four countries signed a framework agreement at $7.6 billion.
Reddy said conflict-racked Afghanistan, which also desperately requires gas, was "very keen on the project" and had pledged security for the pipeline. But energy experts have said instability in the region could yet scuttle the plan.
"We consider it a pipeline of peace," Reddy added. "Everyone needs gas."
The minister indicated that an earlier plan for a pipeline to carry gas from Iran to Pakistan and then India was now on the backburner.
"We do what is more easily possible," Reddy said, referring to the Turkmenistan project.
Washington, which has spearheaded sanctions against Iran over its nuclear programme, favours the TAPI pipeline and has pressured both India and Pakistan to hold off on a pipeline deal with Tehran.
Reddy said New Delhi was continuing to import oil from Iran and was not bound by new sanctions imposed by the European Union on the Islamic Republic earlier this week.
"We, as a member of the UN, are obliged to follow UN sanctions. Other sanctions imposed by big blocs of countries -- we can have some freedom there," Reddy said.
Iran is India's second-largest oil supplier after Saudi Arabia.
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This is a great move. Much of the employment will be created in Pakistan.
@Arijit Sharma: What is wrong in proving trasit facilities. Contiguous countries cannot avoid the transit of goods and people. On day or the other it has to happen. North America set an example and Europe followed suit, now S. America, and parts of Africa are already working in this direction.
No one country is asking a free ride in this. The consuming country pays the fair share of the producer price, and the transit fees as agreed upon. The prosperity of All people of Asia, where 2/3 of humanity lives depend on this contiguous trade and cooperation and exchange of resources.
One cannot change the past but can set a design for the future. One day Iran gas will flow through the line and that time TAPI and IPI together will be the energy security and economic prosperity of the region.
This is a dream that's never going to happen and we should focus the Iranian pipeline while letting the others continue working on this with our ok that we'll be on board when its ready to go. The Americans keep using treacherous leaders act in US national interests rather than the interests of their own countries. We need Iranian gas and thats the one that's most practical...screw the Americans......man migham irani gas!
TAPI now and Iran gas later. Iran gas is not expected to flow through the pipeline until the present stand off between Iran and US is over, which will likely take another five years.
Sometime in the future Iran gas will flow. At that time the region will have two sources of gas supply. Insisting on only Iran and not TAPI will only exacerbate the delay and shortage and gas price in the region.
TAPI project blessed by US is not without conditions for Pakistan - one of them is to have good relationship with India (the way they define it). The project is a national security threat for Pakistan, a failed investment and lack commercial merits.
There is significant wealth potential in both Afghanistan and Pakistan in gas transit fees alone -- unfortunately that's going to require peace/stability and that appears to be a long way off.
@Amit - India is so free that it's own people like Salman Rushdie and MF Hussain are restricted from entering it by the establishment and religious/political groups.
P.S. I am an Indian & Hindu before you think anything else.
@Ijaz Habib: slims chips? Nimco?
@amit we know how much india is free.
@Karan: Grow up. I f you have nothing positive to contribute then perhaps silence is better. As for the topic at hand, yes! This is better for everyone. let us help each other out.
@amit: India is so free that little American pressure made them pull out of Iran gas pipeline
This is crazy. I don't accept it.
@Ijaz Habib: You can also export clean air to India by shutting down ur factories :)
Pakistan and India must have trade ...we can import oil from them and send them our own products like Tibet snow ,Sohrab cycle ,and and and ...help me out here guys ...
i don,t know about pakistan but india is a free country.jai hind