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India, Pakistan to buy natural gas from Turkmenistan PDF Print E-mail
Sunday, 27 April 2008

India and Pakistan yesterday committed themselves to buying natural gas from Turkmenistan despite cost of laying pipeline from the Central Asian nation doubling to 7.6 billion dollar and the energy-hungry countries close to striking a deal for a rival line from Iran, reports PTI.

The South Asian neighbours and Afghanistan signed the Framework Agreement with Turkmenistan for laying the line by 2015. Two-days of deliberation of the Steering Committee of the Turkmenistan-Afghanistan-Pakistan-India pipeline, that has the U.S.

backing, saw the formal induction of New Delhi and resolved issues regarding gas reserves in Turkmenistan and demand of the South-Asian neighbours. After the meeting, Pakistan’s Petroleum Minister Khwaja Asif said: “We are strongly committed to the project. We believe it is still economically viable for the four countries even after the escalation in cost.”

According to a draft feasibility study prepared with the support of the Asian Development Bank, which is financially backing the pipeline, the estimated cost of the project has increased from USD 3.3 billion in 2004 to USD 7.6 billion.

The escalation was due to sharp rise in steel prices, jump in construction costs and cost of compressor stations to be set up for the 1,680-km line from Turkmenistan’s Daulatabad gas field to Fazilka on the India-Pakistan border after passing through Herat and Kandahar in Afghanistan and Multan in Pakistan.

Turkmenistan gave an undertaking that it would provide a certification of its confirmed gas reserves by September 30, before the next ministerial-level meeting on the T.A.P.I project, Asif told a news conference also addressed by India’s Petroleum Minister Murli Deora and Afghan Minister of Mines Mohammad Ibrahim Adel.

India Wednesday joined the pipeline project as a full- fledged member and the ministers of the four countries initialled an agreement to formalise India’s participation in the venture before the news conference.

Replying to a question on security for the proposed pipeline in violence-prone Afghanistan, Asif said the four nations would sort out all security-related issues “when the project starts”. “Once the consortium (which will build the pipeline) is in place, we will address all security issues.”

Pakistan’s Petroleum Secretary Farrakh Qayyum said the T.A.P.I pipeline would be built by a consortium that will be chosen after a request for proposal is floated. The sharing of the cost of the project between the four countries and the pricing of the gas will be decided in future discussions.

Discussions during the two-day meeting of the Steering Committee of ministers also focussed on confirmation of the market demand for natural gas in Afghanistan, Pakistan and India and a gas pricing proposal by Turkmenistan and the counter offer from the three other countries.

Turkmenistan’s Oil and Gas Minister Baymurad Hojamuhamedov informed the meeting that “huge new gas reserves” had been found in his country. The Turkmenistan government will award a contract for certification of reserves of various gas fields to a British consultant by the end of this month. The report will be available in five months.

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