TAPI gas line in doldrums

Oct 23, 2008 02:00 AM

Turkmenistan has failed to submit the gas certification to Pakistan which is mandatory to materialize TAPI (Turkmenistan-Afghanistan-Pakistan-India).
Pakistan in a latest communication to Asian Development Bank (ADB) which is financing the project and also coordinating between the four stakeholder countries expressed its concern of the delay in provide the reserves certification which is mandatory to bring the ongoing negations to logical conclusion.

According to a senior government official at Ministry of Petroleum and natural resources, Turkmenistan was to provide the gas reserves certification of Dauletabad gas field to buyer countries on October 1, 2008, but the seller country has failed. However, the official said that Pakistan has been communicated that Turkmenistan would now provide the gas reserve certificate in the steering committee meeting of the stakeholder countries that is to be held in New Delhi.
Turkmenistan claims that it had total gas reserves of 7.3 tcm but Pakistan and India want certification about the gas reserves before further moving ahead towards TAPI gas pipeline project and in the meeting of steering committee on TAPI. Turkmenistan will supply 3.2 bn cfpd and Pakistan, Afghanistan and India would share the gas.

Sources said that the Asian Development Bank (ADB) would take up the issue of a comprehensive review of the feasibility study of the project in order to move forward in order to invite investors for carrying out the project. They said that the stakeholders would also take up the issue of forming a consortium of investors to undertake detailed feasibility study of the project. The ADB has estimated a cost of $ 7.6 bn of the project in the year 2008 against the earlier projected cost of $ 3.3 bn in 2004 that would further escalate if the current trend of the inflation continued.
The price increase is due to sharp hike in price of steel, construction cost and cost of compressor stations. However, the ADB has said that in spite of the escalation in price, the project is still economically and financially viable.

They said that during the meeting in New Delhi, pricing mechanism of gas, transit fee and security situation in Afghanistan would also be discussed. They said that Turkmenistan wants to link the gas prices with international market and gas price revision could be made if the exported gas from Turkmenistan is linked with international pricing mechanism.
Afghanistan had given two years time frame for the clearance of all land mines on the proposed route of Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline in the last meeting of steering committee in Islamabad and the said country would submit a report of progress in this regard.

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