The repercussions of the boiling tension between Pakistan and India on the Line of Control are being felt in all spheres of life as talks on a crucial transnational gas pipeline in New Delhi have been postponed, apparently dealing a blow to the United States.
The US has been pressing Pakistan to go ahead with the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline and shelve the Iran-Pakistan pipeline project because of a standoff with Tehran over its alleged nuclear programme.
According to sources, the US had invited Pakistan to participate in talks on the TAPI pipeline in India on August 22, but Islamabad refused to attend apparently because of tension with New Delhi, leading to postponement of the dialogue.
“A representative of the US State Department and Chevron officials, who were visiting India to discuss issues pertaining to the pipeline, had asked Pakistan to join them, but Pakistan’s refusal caused the talks to be put off,” a source familiar with the development said.
US firm Chevron is interested in financing the pipeline, which will pass through war-torn Afghanistan, and is seeking a stake in developing gas fields in Turkmenistan.
Sources revealed that the Joint Working Group on the project met in Dubai on August 18-19 and a follow-up meeting would be held in New Delhi some time later.
The countries participating in the project have agreed to hire the Asian Development Bank (ADB) as transaction adviser to raise funds to meet the escalating cost, estimated to exceed $10 billion compared to earlier forecast of $7.5 billion because of delay in kicking off work.
In a fresh development, Afghanistan has signed a gas sale and purchase agreement to become part of the project, abandoned earlier by Kabul, saying it was only interested in transition fee. These developments took place in Ashgabat, Turkmenistan in the first week of July.
The participating countries have also negotiated the transaction adviser fee for the ADB. Earlier, the bank sought $100 million in fee and $50,000 per month as retaining cost of the project. On the insistence of participating countries, which asked the ADB to bring the fee down to $30 million, the bank agreed on $50 million.
“This issue is still to be settled with the ADB, which will be hired as transaction adviser to generate the entire cost of the project,” an official said, adding the four countries had also agreed to contribute $5 million as token money to the TAPI Company.
Afghanistan had earlier refused to contribute funds, saying it did not need the gas to be supplied by the pipeline. Now that Kabul has signed the gas sale and purchase agreement with Turkmenistan for import of 500 million cubic feet per day (mmcfd), it will also contribute $5 million, according to sources.
During July talks, the issue of security in Afghanistan also came under discussion. Kabul assured the meeting that it would protect the pipeline despite a volatile security situation.
Under the original plan, 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 supply gas through a 1,800km pipeline that will reach India after passing through Afghanistan and Pakistan.
Published in The Express Tribune, August 23rd 2013.