The Cabinet on Thursday gave its nod for signing of the gas sales and purchase agreement (GSPA) for the $7.6-billion Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project, which would ferry gas from Turkmenistan.

Unlike the Iran-Pakistan-India (IPI) pipeline project, TAPI has been supported by the US. A steering committee meeting of the member countries is expected to take place in Turkmenistan soon. The import of gas is scheduled to commence after five years of the signing of GSPA.

The GSPA contains all the contractual terms and conditions, including the gas price. The GSPA will be signed bilaterally between the members. Subsequent to the GSPA bids for building and operating the pipeline will be invited.

Member countries of the Turkmenistan-Afghanistan-Pakistan-India Gas Pipeline Project have agreed transit fee which is expected to be about 50 cents. The transportation charges will be finalised when the project gets implemented by the consortium and all costs are known, sources privy to the development said.

Transit fee is a crucial issue in such projects as invariably the country at the tail-end of the project ends up paying the maximum. However, sources said India and Pakistan will pay a uniform transit fee to Afghanistan.

India would like the delivered price (landed cost) of Turkmenistan gas to be in the same range for all buyer countries – Afghanistan, Pakistan and India. India wanted that the Turkmenistan gas price should be more attractive than the current long-term contract price. Rough estimates show that the Turkmenistan gas may cost around $10/mmBtu.

The project envisages the construction of a 1,700-km-long pipeline, which would originate from Turkmenistan, travel through Afghanistan and Pakistan, before entering India. It would carry 90 mmscmd gas of which 14 mmscmd would be for Afghanistan and 38 mmscmd each for India and Pakistan.

>Shishir.s@thehindu.co.in

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