Bangla shows interest in joining TAPI gas pipeline

As four nations to the TAPI gas pipeline look to sew a consortium that will build the line, Bangladesh has evinced interest in joining the multi-billion dollar project.

"There was a request from Bangladesh to join the project.

"We require official note for this which will be considered by all the four governments of TAPI project," Turkmenistan's Acting Minister of Oil & Gas Industry and Mineral Resources Kakageldy Abdullaev said at Petrotech 2012 Conference in New Delhi.

The Turkmenistan-Afghanistan-Pakistan-India project countries have invited firms which can become consortium leaders for executing the 1,680-km cross-country project.

The pipeline length would be increased if the project is extended to Bangladesh.

Abdullaev said roadshows to attract firms that would build the project were recently held in New York, London and Singapore and there was 'substantial interest' from institutional investors.

The Asian Development Bank is the lead partner for the project and is helping the four nations put a credible consortium that would build and operate the line passing through volatile Afghanistan and Pakistan territories.

The TAPI pipeline would originate from Turkmenistan and pass through Afghanistan and Pakistan before entering India.

It will have a capacity to carry 90 million standard cubic metres a day (mmscmd) gas for a 30-year period and will be operational in 2018.

India and Pakistan would get 38 mmscmd each, while the remaining 14 mmscmd will be supplied to Afghanistan.

The Minister said Gas Sale and Purchase Agreements have already been signed with Pakistan and India and the entire process of selection of the consortium leader and finding the investors is expected to take one year.

The construction of the pipeline is expected to start in 2015.

Bids

will now be invited to select the consortium leader who will be responsible for the design, funding, building, control and subsequent operations of the pipeline.

The US is backing the TAPI pipeline as an alternative to the Iran-Pakistan-India line in its efforts to choke Tehran financially over its suspected nuclear weapon programme.

While New Delhi had reached agreements on price and transit clauses for the IPI pipeline, TAPI is the first transnational line for which it has signed a GSPA in May this year.

Besides meeting its energy needs, TAPI would be test of peace between India and Pakistan.

More importantly, it will test Islamabad's resolve to normalise trade with India by allowing safe passage of the gas through the 800 km section of the pipeline passing through its territory.

Also, the 735-km leg through the Afghan provinces of Herat and Kandahar would presents significant security challenges.

TAPI will carry gas from Turkmenistan's Galkynysh field, better known by its previous name South Yoiotan Osman that holds gas reserves of 16 trillion cubic feet.

From the field, the pipeline will run to Herat and Kandahar province of Afghanistan, before entering Pakistan.

In Pakistan, it will reach Multan via Quetta before ending at Fazilka (Punjab) in India.

Sources said India will pay for the gas only when it is delivered to it at its border.

Afghanistan and Pakistan would get $0.50 per million British thermal unit as transit fee from India.

Turkmenistan is promoting TAPI pipeline as a key element in plans to cut reliance on supplies to Russia and to boost annual gas exports to 180 billion cubic metres by 2030.

BP data show Turkmenistan's natural gas reserves equal to those of Saudi Arabia, and behind only Russia, Iran and Qatar.