US companies, Chevron and ExxonMobil, and Russian company Gazprom are among those that have shown interest in being part of the consortium that will be mandated to construct the TAPI Gas Pipeline project.

Indian gas transportation and transmission major GAIL (India) may also take a small equity participation in the consortium, sources said, adding that decision with regard to the consortium will be made either in 2012 or 2013.

The decision will be jointly taken by member countries — Turkmenistan-Afghanistan-Pakistan-India — in consultation with the Asian Development Bank (ADB).

ADB will render technical advice with regard to the terms and conditions for potential consortium partners and be involved in the final selection process, sources added.

Once the Gas Sale and Purchase Agreement (GSPA) has been signed, all TAPI member-countries, with assistance from ADB, will work towards finalisation of the consortium, whose mandate is to build the pipeline and operate it for 30 years.

The three buyers will be paying transmission fee to the consortium for the gas utilised from the pipeline. All sides want the consortium to be financially capable, technically competent and politically adaptable for building and operating the pipeline.

Pricing

The gas price formula which will determine the price payable to Turkmenistan by India remains to be finalised. “There have already been two bilateral meetings with Turkmenistan to inch closer towards agreement. Over and above the gas price, the Indian side has to finalise transit fees payable to both Afghanistan and Pakistan,” sources said.

The next TAPI Steering Committee meeting is planned in Ashgabat on September 20-21. All sides are working to reach an agreement on the price issue, sources said.

The TAPI project envisages constructing 1,680 km of pipeline with a total gas capacity of 90 mscmd. The length of pipeline in Turkmenistan, Afghanistan and Pakistan up to the Indian border is 145 km, 735 km and 800 km, respectively.

(This article was published on September 13, 2011)
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