Finalising the TAPI pipeline: officials to meet in Ashgabat next week

Officials of Pakistan, India, Afghanistan and Turkmenistan are set to meet in Ashgabat next week to push ahead with a planned transnational gas pipeline connecting the four countries and reach a settlement on the award of the multi-billion-dollar project to US companies.

The Turkmenistan, Afghanistan, Pakistan and India (TAPI) gas pipeline would tackle energy shortages in Pakistan.

Two US firms – Chevron and ExxonMobil – are in the race to become consortium leaders, win the project and finance the laying of the pipeline,” according to a senior government official.

The TAPI gas pipeline project

According to officials, Pakistan Petroleum and Natural Resources Minister Shahid Khaqan Abbasi will lead a delegation at the meeting of the TAPI pipeline steering committee on 8 July in Ashgabat.

Before this meeting, a technical group will hold talks on 6 and 7 July to settle technical issues pertaining to bid documents. At present, bid documents are being prepared in consultation with the Asian Development Bank, which is playing the role of transaction adviser.

Chevron is lobbying in India, Pakistan and Afghanistan to clinch a deal, backed by the US State Department. However, other companies could also become part of the consortium that will be led either by Chevron or ExxonMobil.

A technically capable and financially sound company will be selected as the consortium leader, which will design, finance, construct, own and operate the gas pipeline that will start from Turkmenistan.

Officials pointed out that Chevron and ExxonMobil had not yet resolved the issue of gas extraction contracts for fields in Turkmenistan. They want the contracts against financing for building the pipeline, but Turkmenistan does not give onshore exploration rights to foreign companies and is offering offshore drilling concessions to the US firms.

To facilitate the two companies, Turkmenistan, however, offers to swap the gas extracted from offshore fields with that of onshore fields for export to Afghanistan, Pakistan and India under the TAPI project.

China wants to join TAPI

Officials revealed that China had also expressed interest in becoming part of the TAPI pipeline project. “Once the gas extraction contract issue is resolved, we will hold negotiations with Beijing,” an official said.

“The extension of the pipeline to China through Gwadar will give a boost to economic activities in Balochistan. Bangladesh has also expressed interest and if it formally joins, the pipeline will connect a wider region,” the official added.

Pipelines are a cheaper source of gas compared to liquefied natural gas (LNG), which costs in the range of US$ 16 - 18 per million British thermal units (mmbtu). Pakistan faces an acute shortage of gas, particularly in winter, as domestic resources fall way short of meeting its needs and it is weighing all options to secure energy supplies.

Under the TAPI project, Pakistan will receive 1.365 billion ft³/d from Turkmenistan, India will also receive the same 1.365 billion ft³/d and Afghanistan will get 0.5 billion ft³/d.

Turkmenistan will export natural gas through a 1800 km pipeline that will reach India after passing through Afghanistan and Pakistan.

Edited from various sources by Elizabeth Corner

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