Bid & Tender
India Poised to Benefit as Equal Stakeholder in TAPI Gas Pipeline Project

Date : Dec 04, 2015

Close on the heels of the Narendra Modi-Nawaz Sharif meeting in Paris, India will soon join Pakistan in benefiting as equal stakeholder in the much delayed Turkmenistan-Afghanistan-Pakistan-Iran (TAPI) gas pipeline whose construction is finally set to begin on December 13.

 

The Modi government is planning to send a senior minister to the groundbreaking ceremony when Turkmenistan President Gurbanguly Berdymukhamedov will launch construction of pipeline that has the potential to meet some of India's energy demands, officials said. Afghanistan President Mohammad Ashraf Ghani will also attend the ceremony.

 

Energy could emerge as an area of cooperation for India and Pakistan as Prime Minister Narendra Modi has in the past been keen to push economic relations with the neighbouring country, experts said. This pipeline could emerge as a major confidence building measure between the two countries after Iran-Pakistan-India gas pipeline failed to take off and only Iran-Pakistan part is expected to be operational. While Iran has completed its part of the pipeline, Pakistan fell behind the target to take gas deliveries in the winter of 2014.

 

State-owned companies Turkmengaz and Turkmengazneftstroi will begin building Turkmen section of the pipeline and the government expects the pipeline to be fully operational by the end of 2018, bringing much-needed energy to South Asia.

 

Originally the cost of the pipeline project, in which Asian Development Bank is playing an important role, was reportedly estimated at $7.6 billion, but a more recent estimate was $10 billion. Earlier this year, TurkmenGaz was selected as the pipeline consortium leader.

 

Last year, gas companies of Turkmenistan, Afghanistan, Pakistan, and India (GAIL) established a company that will build, own and operate the planned 1,800 km. The pipeline will export up to 33 billion cubic meters of natural gas a year from Turkmenistan to Afghanistan, Pakistan and India over 30 years.

 

Prime Minister Modi visited Turkmenistan in July and in August India agreed to joint ownership of the pipeline. This lent a new impetus to the project. Representatives of national gas companies from the four countries later met to discuss the shareholding pattern of a consortium they plan to form for laying and operating the pipeline.

 

India expects a substantial Japanese involvement in the project. "We are the buyers. Turkmenistan is the seller.

 

So if the seller is taking leadership role in the consortium, it is a big assurance for (the success of) the project. They (Turkmenistan) are also discussing co-operation in the oil and gas sector with Japan. So Japanese involvement is also expected. All this will only strengthen the project," oil minister Dharmendra Pradhan had said following his visit to Ashgabat, capital of Turkmenistan in August.

 

In August Pradhan was in Ashgabat for the project's 22nd steering committee meeting. At that meeting, oil ministers from the four countries decided to form the consortium after efforts to rope in a major global firm as consortium leader failed. Turkmenistan will lead the consortium with at least 51% stake.

 

India and Pakistan will get 38 million standard cubic feet per day (mmscmd) each, while the remaining 14 mmscmd will be supplied to Afghanistan. The pipeline will carry gas from Turkmenistan's Galkynysh field, better known by its previous name South Yoiotan Osman that holds gas reserves of 16 trillion cubic feet. From the field, the pipeline will run to Herat and Kandahar province of Afghanistan, before entering Pakistan. In Pakistan, it will reach Multan via Quetta before ending at Fazilka (Punjab) in India.

 

Meanwhile, oil rich Kazakhstan is willing to supply gas to India. Kazakhstan could supply as much as 3 billion cubic metres of natural gas annually through a proposed pipeline from Turkmenistan to India, according to Kazakh government officials.

 

"Discussions are currently taking place with the Indian side about the possibility of increasing the capacity of the pipeline, taking into account the potential gas supplies from Kazakhstan. Our country is ready to transport up to 3 billion cubic metres annually through this pipeline," Kazakhstan's foreign minister recently said at a meeting on energy issues.