TAPI countries sign gas pipeline deal

After more than 20 years of delicate negotiations, Turkmenistan, Afghanistan, Pakistan, and India (TAPI) finally signed an agreement on Wednesday for a 1,800-kilometre natural gas pipeline that would connect one of Central Asia’s largest energy suppliers with South Asia’s critically underserved market.
A statement issued by the Ministry of Petroleum said that Petroleum Minister Dr Asim Hussain had termed the development as an important milestone in regional relations, and said that the project would help in meeting the energy requirements of Pakistan in the long run. TAPI gas pipeline is a 30-year agreement under which Turkmenistan will supply 1.34 billion cubic feet per day (bcfd) of natural gas to Pakistan. The TAPI project is scheduled to be completed by October 2017. 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 China.
An agreement 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 billion. A statement issued by the Asian Development Bank (ADB), which has played a leading role in coordinating and facilitating the TAPI negotiation process over the past 10 years, said that Pakistan’s Inter-State Gas System Limited and India’s GAIL Limited signed gas sales and purchase agreements with Turkmenistan that would lead to the supply of up to 90 million cubic metres of natural gas per day. Afghanistan also signed a memorandum of understanding on long-term gas cooperation with Turkmenistan. “This is a truly historic moment of unparalleled regional cooperation,” said Klaus Gerhaeusser, director general of the Central and West Asia Department ADB, which has acted as the TAPI Secretariat since 2002. 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. “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 would help 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.”