The timeframe for the finalisation of the gas sale/purchase agreement under the Turkmenistan, Afghanistan, Pakistan and India (TAPI) Gas Pipeline Project is likely to be finalised at the ministerial steering committee’s meeting in New Delhi on April 28.
An official source at the Ministry of Petroleum said the meeting would also settle the general agreement of gas buyers’ consortium and hiring of the technical advisor for the transitory period. Advisor to Prime Minister on Petroleum Dr Asim Hussain would represent Pakistan in the talks.
The four neighbouring countries have already signed the TAPI gas pipeline framework agreement in September last year. Under the agreement, parties agreed to the formation of a pipeline consortium with equal shareholding of participating countries lead by an oil and gas major to undertake the financing, construction and operation of the pipeline.
They also settled the issues relating to gas specification and now only the sale purchase agreement remained undecided for expediting implementation on the project.
The Asian Development Bank (ADB), the leading partner in 1,680 km pipeline, expects an investment of $ 7.6 billion for the project. It estimates start of first flow of gas from Turkmenistan in December 2018. However, the importing countries want it to be brought forward to June 2016.
Giving details on the general agreement of gas buyers’ consortium, the source said it was proposed to finalise pricing issues as negotiation with each country might take longer time. Pakistan, he said, had proposed to keep uniform price of imported gas for all countries including Afghanistan and India.
Pakistan is of the opinion that transportation charges and transit fee should not be made part of the price and has suggested linking the imported gas price with the domestic prices instead of linking it with Liquefied Petroleum Gas (LPG) or crude oil.
Turkmenistan wants gas pricing formula to be adjusted every three months and base price was suggested equal to landed cost of the LNG in Pakistan.
After finalising the price, Pakistan’s Inter State Gas Systems Limited (ISGS) will sign GSPA with the Central Asian state’s national oil firm Turkmengaz.
The project is expected to be completed in five years before the gas from Turkmenistan starts flowing to the energy-deficient South Asia. It is said that the pipeline would have a 56-inch diameter with a working pressure of 100 standard atmospheres. It will require six compressor stations to be constructed along the route.
The gas pipeline will be designed to carry 3.1 billion cubic feet per day (BCFD) of gas from Turkmenistan, delivering 0.5 BCFD to Afghanistan and 1.3 BCFD each to Pakistan and India. Pakistan plans to generate 6000 MW of electricity by utilising the imported gas.
Turkmenistan has world’s fourth-largest natural gas reserves. The former Soviet state is looking to diversify energy sales from its traditional market, Russia, and is courting investors from China and other Asian countries in the region. Ashgabat hopes to include Southern Yoloten-Osman in addition to the Daulatabad gas field in the project.
Its reserves are estimated at 21 trillion cubic meters of gas and will serve as the resource base for the pipeline.
