New Delhi: In a significant move towards making the proposed Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline a reality, the four countries have decided to call bids from potential anchor investors to share the risks involved in the $3.3 billion (Rs 15,015 crore) project.
Officials from the four nations met in Ashgabat in Turkmenistan on 20 September, where the decision was taken.
“This company may belong to US or Russia or any other country,” said a senior official at India’s ministry of petroleum and natural gas, who attended the meeting. “It’ll also help in derisking the project.”
Turkmenistan wants a final agreement signed before December, the official said, adding that an anchor investor would be enlisted even if there is just one bid for the project.
A second ministry official said a consortium may be responsible for laying, owning and operating the pipeline. The structure to develop the pipeline is yet to be finalized.
The Asian Development Bank is the lead partner in the 1,680km pipeline project expected to have a capacity of piping 90 million cu. m. per day (mscmd) of gas from Turkmenistan’s Gunorta Yoloten-Osman fields.
The fields are thought to hold 6 trillion cu. ft of gas. While India is expected to get 14 mscmd of gas, Afghanistan and Pakistan may get 38 mscmd each.
India is seeking overseas assets and supplies in a push that has pitted the country against China in a geopolitical race to sew up as much of the world’s resources as it can. China and India are the world’s fastest growing major economies.
India produced 47,573 million cu. m of natural gas and 33.688 million tonnes of crude oil in 2009-10, missing the planned target by 8.8% and 11.4%, respectively.
The pipeline, proposed in the early 1990s, has been delayed by political and economic issues. The main issue is security because the pipeline passes through Afghanistan and Balochistan (Pakistan), both considered to be unstable areas where the project may face the risk of sabotage. India joined the project in April 2008.
While referring to the Iran-Pakistan-India and the TAPI pipelines, former foreign secretary Kanwal Sibal had previously told Mint that “given the volatile situation in our region, it’s hard to imagine when the pipelines will fructify”.
The four partner countries have already given their go-ahead for a gas pipeline framework agreement (GPFA) and the initial agreements for gas sale and purchase. The agreements were signed on India’s behalf by minister of state for petroleum and natural gas Jitin Prasada. While the cabinet has given its in-principle approval to GPFA, a final agreement will be signed only after the cabinet gives it the final go-ahead.
In a related development, Afghanistan has promised to guarantee the project’s safety.
“In the seventh technical working group meeting, Pakistan will spell out its commitment. Even Pakistan needs the gas and both of them will benefit from the supplies and the transit fees that they will earn,” said the first official.
Reuters reported that Afghanistan’s mines minister Wahidullah Shahrani will secure the pipeline through the Taliban heartland by burying sections underground and paying local communities to guard it.
Prasada, in an official statement, said the project’s success depends on the transit fee being minimum, security issues being properly addressed and complete clarity on institutional mechanisms. He added that pricing and other GSPA issues should be resolved before taking the project further.