Turkmen state company to lead TAPI pipeline construction efforts

The decision was reached unanimously at a meeting of the TAPI steering committee by ministers from the four countries

ASHGABAT: Officials in energy-rich Turkmenistan announced on Thursday that state company Turkmengaz will lead the consortium for a 1800-kilometre-long pipeline carrying gas from the former Soviet state to energy-hungry India, Pakistan and Afghanistan.

The decision, which was reached unanimously at a meeting of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) steering committee in Ashgabat by ministers from the four countries was relayed by the country's state news agency.

"The state concern 'Turkmengaz' in its capacity as leader of the consortium for the Pipeline Company 'TAPI Limited' will oversee coordination in the construction, financing, ownership and operation of the TAPI pipeline," the agency announced Thursday.

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A Turkmengaz official speaking to AFP on condition of anonymity said the decision did not mean foreign companies could not participate in a project, which costs an estimated $10 billion.

"Turkmengaz will lead and coordinate the work of the consortium in which foreign companies will also enter. Their proposals are currently being studied," explained the official, without disclosing which companies had made proposals for the project.

Previously Western energy majors such as Chevron, ExxonMobil and Total had been reported as potential leaders of the TAPI consortium.

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The TAPI pipeline seeks to connect growing energy markets in South Asia with the mostly untapped potential of Turkmenistan, a country with the fourth largest reserves of natural gas in the world.

TAPI is expected to ship up to 33 billion cubic metres (bcm) of gas annually from Turkmenistan, most of which will be absorbed by India and Pakistan with Afghanistan importing smaller amounts.

Read: Work on TAPI to start by December

The project is key for isolated Turkmenistan, whose economy is almost entirely hydrocarbon-based and heavily dependent on China, which accounts for over 75 percent of its gas sales.

Turkmenistan began exports of gas to China in 2009 and aims to export up to 65 bcm there annually by 2020, but by 2018 may face competition from a rival pipeline scheduled to carry 38 bcm annually from Russia to China.