Turkmens close to gas deal on trans-Afghan pipeline
Turkmenistan, which holds more than 4% of the world's natural gas reserves, plans to sign the sales and purchase agreement for the TAPI pipeline on Wednesday, during an international gas conference in the Caspian Sea resort of Avaza.
"The plan is to sign the TAPI natural gas sales and purchase agreement with Islamabad and Delhi on May 23 in Avaza, by the Caspian, where the gas congress is opening," the government source said, on condition of anonymity.
He gave no details of the content of the agreement.
The idea of the TAPI pipeline, an acronym formed from the initials of the four countries through which it would pass, was first raised in the mid-1990s but construction has yet to begin.
In a sign a deal might be imminent, India's cabinet last week allowed state-run gas-firm GAIL (India) Ltd to sign a gas purchase agreement with Turkmenistan.
Turkmen officials have said the proposed 1,735-km (1,085-mile) pipeline could carry 1 trillion cubic metres of gas over a 30-year period, or 33 billion cubic metres a year.
But the route, particularly the 735-km (450-mile) leg through the Afghan provinces of Herat and Kandahar, presents significant security challenges and will require billions of dollars in funding.
A US official estimated in March that the pipeline could cost between $10 billion and $12 billion to construct.
Daniel Stein, senior adviser to the US State Department's special envoy for Eurasian energy, also said that two major US oil companies were interesting in participating in the project. He declined to name the companies.
Ex-Soviet Turkmenistan is promoting the TAPI pipeline as a key element in plans to cut reliance on supplies to Russia and to boost annual gas exports to 180 billion cubic metres by 2030.
BP data show Turkmenistan's natural gas reserves equal to those of Saudi Arabia and behind only Russia, Iran and Qatar.
The country aims to supply gas from its Galkynysh field, better known by its previous name, South Iolotan. Auditor Gaffney, Cline & Associates has ranked the field the world's second largest, with gas reserves of between 13.1 trillion and 21.2 trillion cubic metres.
Volumes and fees
Turkmenistan's unflinching policy of selling gas at its own borders means Pakistan and India would need to settle volumes, price and transit fees with each other and with Afghanistan.
The Indian government said in a statement on May 17 that the pipeline would be operational in 2018. India and Pakistan would each get 38 million cubic metres per day (mcmd) of gas, while the remaining 14 mcmd would be supplied to Afghanistan, it said.
Indian Petroleum Minister S. Jaipal Reddy is scheduled to lead his country's delegation to Turkmenistan to sign the agreement. India has nominated GAIL for the purchase of gas.
Separately, an Indian Oil Ministry official said last week that the transit fee for the gas had been fixed at about 50 cents per million British thermal units (mmBtu).
India, Asia's third largest oil consumer, imports about 80 percent of its oil needs while falling local gas output has forced it to buy costly liquefied natural gas.
"We expect that India will more than double gas consumption over the next 25 years," Ulrich Benterbusch, director of the Global Energy Dialogue at the International Energy Agency, told an international energy conference in Uzbekistan last week.
"Domestic gas production in India will not be able to keep up," he said.
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@Zamir Malik
I'm sorry to say but you're misinformed and better revisit your sources. Anyone with a business or economics background would tell you that the TAPI will be more beneficial for Pakistan. I-P project is mainly beneficial to the politicians and govt employees in certain sectors who will gain from major kickbacks.
Let me rectify my fellow that IP project will cost 7.2bn dollars.Moreover,given the severe sanctions imposed on iran in view of its alleged nuclear program,those agencies which were to finance the said project have withdrawn and Pakistan is trying seek rather convince international agencies to finance the same,but so far it has yet to entice the donors.Similiarly pakistan's entering into the said project will invite the ire of the western countries,which happen to be the formidable market for pakistani exports.Thus,taking into account all the probable consequences and hitting upon cost-benefit analysis,one finally comes to the conclusion that it could further isolate pakistan on diplomatic cum economic fronts from rest of the world.
@zamir: US and EU told very clearly that they ll put sanctions on textile industry imports from Pakistan if the gas ll be imported from Iran. Even ur closest Saudi Arabia said that they ll not give any budget deficit aid..... I think these reasons are more than enough.
Last but not least Pakistan tried hard to get the finance from any country has veto power in UN for IPI but failed :( On TAPI almost all countries are ready to finance because their father is backing this deal...
@Zamir Malik: The point is not about the merits of Iran-Pakistan pipeline; it is about Pakistan not able to stand the consequences of proceeding with it. Iran has completed its part of the pipeline. It is Pakistan which dare not even make a start on its side.
The Pak Iran Gas Pipe line will cost less than 2 billion and could be completed in less than 2 years and it will supply natural gas for more than 70 years. So what is a better deal 10-12 billions TAPI or less than 2 billion USD PAK-IRAN Pipeline?. I dont know where are our policy makers right now and why we cannot take a stance against international pressure at all. We have an energy rich neighbor and there will be no security threat and we want the pipeline from Afghanistan so that we could be blackmailed in future by the cutting of Gas supplies by Afghanistan. By crossing the pipeline from Afghanistan means that America will have a hand on the knob of Gas supplies to Pakistan and Pakistan could be blackmailed when the need would arise in future. The direct Pipeline of Iran_Pakistan is the most viable but Pakistan is a Slave Country and Slaves cannot say anything to their masters.