TAPI pipeline will be completed by 2017: Moily

Minister for Petroleum and Natural Gas M. Veerappa Moily on Thursday said that the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project that the member countries are committed to complete the network by 2017.

Moily was speaking to reporters here after attending the 17th steering committee meeting of the TAPI project in Turkmenistan.

“A positive ambience for the Steering Committee meeting was created by signing of the Gas Sales and Purchase Agreement that had, so far, been pending between Afghanistan and Turkmenistan, thereby completing the explicit commitment of all four countries involved in the project,” Moily said.

Besides, the Steering Committee decided to conclude the Transaction Advisory Services Agreement and the formation of TAPI Ltd in a time bound manner and committed to the timeline for completion of the project by 2017, he added.

The major objective of the Transaction Advisor Services was to search for a lead partner in the consortium, who will lay the network. “A shortlist of companies will be provided by the Turkmen Party to the Buyers by October/November, 2013 for consideration under competitive solicitation as the potential Consortium Leader for TAPI Ltd,” Moily said.

Attempts to attract the international energy players for building and operating the multi-billion dollar transnational pipeline project had not yielded much results, as the firms also wanted a stake in the giant gas field, Galkynysh, which is the source for the project.

But, the Turkmen authorities were not willing to offer equity participation. This was because according to their Government policy, they offer service contracts and not stakes.

In a ‘service contract’, payment is made in accordance with the services rendered. The company rendering such services is not entitled to any share in oil/gas in that block.

However, this has now changed. Moily said, Turkmenistan has agreed to consider offering stake in the giant field. Asked if any Indian company will participate in the consortium, Moily said, “it will be built by an international consortium.”

The Indian Government while giving its nod for formation of a special purpose vehicle (SPV) for the TAPI Pipeline Project has allowed GAIL (India) to join the SPV. TAPI Ltd is required to have an initial contribution of $20 million, that is $5 million from an identified entity from each of the four participating countries.

The $7.6-billion TAPI project is to transport gas from Turkeminstan. The envisaged 1,080 km pipeline (144 km in Turkmenistan, 735 km in Afghanistan and 800 km in Pakistan) will have a capacity to transport 90 mmscmd of gas — 38 mmscmd each for India and Pakistan and the remaining 14 mmscmd for Afghanistan.

Kabul, according to reports has withdrawn from purchasing its share of gas under the project, and this 14 mmscmd is now available to India and Pakistan. Afghanistan has said that it does not require the gas at present. But, it may approach Turkmenistan in future, if needed.

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