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Business News/ Politics / News/  TAPI gas pipeline project edges forward
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TAPI gas pipeline project edges forward

TAPI gas pipeline project edges forward

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New Delhi: In what may provide a push to the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline becoming a reality, Pakistan on Wednesday announced that it has “in principle" agreed to the same transit fee as that to be worked out between India and Afghanistan.

India has also offered Pakistan exports of petrol, diesel, aviation turbine fuel and fuel oil, among others, from nearby refineries such as state-owned Hindustan Petroleum Corp. Ltd’s Bhatinda facility in Punjab. India may also construct product pipelines to meet growing demand in the neighbouring country.

“Since there is a need to expedite the signing of the gas sale purchase agreement (GSPA), both sides agreed to settle the transit fee issue at the earliest," the Indian government said in a statement. “Pakistan agreed in principle that whatever fee formula is eventually settled between India and Afghanistan would also be acceptable to Pakistan subject to approval of their competent authority."

The Asian Development Bank is the lead partner in the 1,680km pipeline project, also dubbed as the peace pipeline for bringing together nations that share complex and difficult relationships, and is expected to involve an investment of $7.6 billion. The pipeline is expected to have a capacity of 90 million standard cu. m per day (mscmd) of gas from Turkmenistan’s Gunorta Yoloten-Osman fields. Of this, 38 mscmd is planned for India.

The pipeline, proposed in the early 1990s, has been delayed by political and economic issues. The main issue has been security because it 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. Responding to a question about the security threat in Afghanistan, Reddy said, “When we agree on economic issues, that generates its own positive dynamics. It contributes to the feeling of goodwill on both sides." The pipeline’s construction was earlier expected to start in 2012 with the project to be commissioned by 2016. A consortium is expected to be formed to implement the pipeline project with bids to be invited from potential anchor investors to share the risks involved in the project. This group will be responsible for laying, owning and operating the pipeline.

The other pipeline project India has been involved with has been delayed over price and transportation fees India would have to pay Pakistan. Talks on the 2,300km Iran-Pakistan-India (IPI) pipeline started in 1995, but with India clinching the civilian nuclear agreement with the US, the process slowed.

Iran and Pakistan decided to go ahead with the project without India, and have even extended a partnership offer to China. The last trilateral meeting on the IPI pipeline involving Iran, Pakistan and India was held in July 2007.

“Pakistan has already signed a GSPA for IPI," Hussain said.

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ABOUT THE AUTHOR
Utpal Bhaskar
"Utpal Bhaskar leads Mint's policy and economy coverage. He is part of Mint’s launch team, which he joined as a staff writer in 2006. Widely cited by authors and think-tanks, he has reported extensively on the intersection of India’s policy, polity and corporate space.
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Published: 25 Jan 2012, 11:07 PM IST
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