Policy

India begins to get active on TAPI gas pipeline

Nayanima Basu Richa Mishra New Delhi | Updated on January 23, 2018 Published on January 23, 2018

To participate in ground-breaking ceremony in Afghanistan on Feb 23

India seems to be finally looking at the proposed $15-billion TAPI (Turkmenistan–Afghanistan–Pakistan–India) Pipeline, also called Trans-Afghanistan Pipeline with more interest now than ever before.

On February 23, India will be participating at a ground-breaking ceremony for TAPI at Afghanistan that will mark the beginning of formal round of talks amongst the participating countries on the pipeline that is slated to connect central Asia with south Asia covering 1,814 km.

During the event, all the host countries will work on their respective agreements concerning safety, security, taxation, exemptions and fiscal incentives, although financial closure, in other words, terms of the commercial contracts are yet to be negotiated, sources told BusinessLine.

The pipeline originates from Turkmenistan’s Galkynysh field having gas reserves of 16 trillion cubic feet. The project is being funded by the Asian Development Bank (ADB).

Consultants for the project have also been asked to float a tender. The last ground-breaking ceremony took place in Turkmenistan in December 2015, in which India was represented by former Vice- President Hamid Ansari. This marked the beginning of construction of the pipeline although the project was envisaged decades ago.

After that event in Turkmenistan, India has been dragging its feet on the project. A delegation from Turkmenistan was also here last November to understand India’s position in the project.

According to sources, India’s participation in the project has been lacklustre due to Pakistan’s involvement ever since the project was envisaged.

Out of the total 1,814 km., the pipeline will run for 214 km in Turkmenistan, 774 km in Afghanistan along the Kandahar-Herat highway, 826 km in Pakistan through Quetta and Multan and finally reaching the settlement of Fazilka, in India located near the India-Pakistan border.

In November 2014, a consortium the TAPI Pipeline Company Ltd. (TPCL) was incorporated in the Isle of Man, a British Crown dependency. Though all the other countries have begun their ground work, India still seems to be pondering over the strategy on its participation in the project, sources said.

Apparently, Pakistan has asked Turkmenistan to slash gas prices by linking it with Brent crude oil rates under a revised pricing formula for shipments through TAPI pipeline. According to sources, the consultants will float a tender to derive a price on which transportation tariff will be added that will become a key factor for the deal.

In July last year, Afghan President Ashraf Ghani had visited Turkmenistan and held discussions with his Turkmen counterpart Gurbanguly Berdimuhammedov on the gas pipeline.

Meanwhile, the Turkmen President has also urged the business community of Uzbekistan to participate in the project.

The Saudis are also now taking keen interest in TAPI. The Saudi government is investing heavily in the project from the Saudi Development Fund.

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Published on January 23, 2018
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