Pakistan and Turkmenistan are likely to sign an agreement on Turkmenistan, Afghanistan Pakistan India (TAPI) pipeline during the two day official visit of the President of Turkmenistan Gurbanguly Berdimuhammadov starting today. An official source said both the countries have already agreed on the gas sale price of $360 million cubic meter (mcm) at the Turkmenistan Afghanistan border after deduction of $29 mcm as transit and transportation cost through Afghanistan. The cost will be $10 mm BTU. The base price comes to 70 per cent of Brent oil parity in the mid country delivery point of Multan.
Both the countries, he said will sign a risk sharing agreement for Afghanistan, as there are serious concerns over the security of the pipeline transit from Afghanistan. The agreement will also have a condition for price review after 5 years. Pakistani team lead by Petroleum Minister, Dr Asim Hussain had last month finalised the price for gas imports through TAPI pipeline with the Deputy Minister for Energy Turkmenistan Yarmuhammet Orazgulyev.
Turkmenistan had proposed to base the price of imported gas on the other alternate fuel High Speed Furnace Oil (HSFO) available in the local market, as it was also used in power generation. Pakistan plans to utilise the imported gas for power generation, as the country is faced with a power shortfall of 5,000 MW during summers. The pipeline is expected to start gas supply by December 2016, but that depends upon credible security cover to be provided by Afghanistan, which will also be receiving 500 mmcfd of gas, out of total envisaged supplies of 3.2 bcfd.
The Economic Coordination Committee of the cabinet had constituted a committee headed by the Petroleum Minister to finalise the draft of TAPI pipeline project. The committee was asked to submit its report within shortest possible time before the upcoming visit of President of Turkmenistan. TAPI gas pipeline project aims to bring natural gas from Yolotan/Osman and adjacent gas fields in Turkmenistan to South Asian countries. The pipeline will carry 3.2 bcfd natural gas covering 1,680 km from Turkmenistan through Heart and Kandahar in Afghanistan, cross Pakistan border near Chaman to pass near Zhob, DG Khan, Multan, and onwards to Fazilka near Pak-India border. The capital cost of the project is estimated at $7.6 billion and will take between 4 to 5 years to complete after signing of all the contracts. Asian Development Bank (ADB) is acting as the facilitator and coordinator for the project and had funded a feasibility study of the project in 2004.
During the visit of Turkmen President, both the countries are expected to ink agreements for enhancement of economic and trade relations that will also provide opportunity to Pakistani businessmen to explore the Central Asian markets. The total trade volume between two countries was at $43.5 million during 2010-11. Pakistan’s major exports to Turkmenistan include fruit and fruit preparations, medical and pharmaceutical products, while its major imports include raw cotton.
Pakistan and India are undergoing their worst energy crisis. It is time to resolve them. The TAPI project provides best opportunity besides the IP project. Pakistan must serve its national interest and it is in the interest of Pakistan that it must adhere to both IP and TAPI projects to meet its energy needs. If geopolitics could be averted on grating the Most Favored Nation status to India, it should also be averted on both IP and TAPI projects. Lets economic forces to work and build trust and peace. There is no Afghan like irritant on the IP project. Geopolitics should not affect these projects, as they would bring enormous prosperity to Pakistan in the near future.
both IP and TAPI projects are unrealistic, based on arbitrary and unsound perception and planning. Both are not economically viable prepositions. Both the projects are full of risks and are against ground Realities.It is irony of fate that Pakistani rulers and bureaucrats always do what they should not do and do not do what they should do. The installed capacity of electricity is enough if run properly. For expansion, they should concentrate on hydro, coal, alternate energy instead of importing gas / electricity.They should concentrate on oil and gas exploration indigenous. For short term shortfall of gas, LNG may be imported from Qatar.
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