Pakistan, India and Turkmenistan sign deals for gas supply

May 24, 2012 12:00 AM

Pakistani and Indian companies signed Gas Sales and Purchase Agreements (GSPA) with Turkmenistan that will lead to the supply of up to 90 mm cmpd of natural gas via the Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline.
The project was signed at the Caspian Resort of Avaza, Turkmenistan, where Dr Asim Hussain, Minister for Petroleum and Natural Resources, is leading the Pakistani delegation.

Hussain termed this development as an important milestone and said that this project will help in meeting the energy requirements of Pakistan in the longer run. The TAPI GSPA is a thirty years agreement whereby Turkmenistan will supply 1.34 bn cfpd of natural gas to Pakistan. TAPI project is scheduled to be completed by October 2017.
The bulk of exported gas will help meet surging energy demand in India and Pakistan, where energy needs are set to double by 2030, while the remainder will alleviate chronic power shortages in Afghanistan.

Earlier, GAIL (India) Limited signed the GSPA after agreeing to a transit fee during tripartite talks between Pakistan, Afghanistan and India in Islamabad last month. Pakistan has also completed the negotiations on transit fee as agreed between Afghanistan and India.
On the occasion, Secretary Petroleum Muhammad Ejaz Chaudhry said the TAPI pipeline project would provide much needed natural gas to the country and would help Pakistan in enhancing economic growth of the country. He further added that the project would also strengthen the relationship between the countries involved.

According to an Asian Development Bank (ADB) announcement, after more than 20 years of delicate negotiations, a 1,800 km natural gas pipeline that connects one of Central Asia’s largest energy suppliers with South Asia’s critically underserved market has come one step closer to reality, marking an unprecedented new chapter in regional relations.
“This is a truly historic moment of unparalleled regional cooperation,” said Klaus Gerhaeusser, Director General of the Central and West Asia Department at the Asian Development Bank (ADB), which has acted as the TAPI Secretariat since 2002.

ADB has played a leading role in coordinating and facilitating the TAPI negotiation process over the past 10 years.
“The pipeline represents a win-win scenario for each TAPI country, as it will give Turkmenistan- with the world’s fourth largest reserves- more diverse markets and helps fuel the energy-hungry economies to the South,” Gerhaeusser said. “Each country stands to gain, making this not only the ‘Peace Pipeline,’ but a pipeline to prosperity as well.”

With the TAPI pipeline in place, Turkmenistan’s gas will reach a greater range of overland markets, diversifying from its existing markets in Russia, Iran, and the People’s Republic of China.
Furthermore, a GSPA between Afghanistan and Turkmenistan is expected to be finalised shortly. The next step is for the four TAPI nations to attract commercial partners to build, finance, and operate the pipeline, estimated in 2008 to cost at least $ 7.6 bn.

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