Indo-Turkmenistan gas line talks next week

A delegation from Turkmenistan’s state-owned gas company will be coming here on Monday for bilateral discussions on the gas sales purchase agreement (GSPA) for the Turkmenistan-Afghanistan-Pakistan-India (Tapi) pipeline.

Officials said the landed cost of gas would have risen considerably after payment of transit and transportation fees as India was at the tail of the pipeline. It has, therefore, suggested changes in the proposed pricing formula. The formula is linked to a basket of low and high sulphur fuel oil.

After its India visit, the Turkmenistan delegation, led by Momayev Dovelet, deputy chairman, Turkmengaz, would be going to Pakistan and Afghanistan for talks on GSPA. India is expected to get 38 million standard cubic metres a day of gas from Turkmenistan through the transnational pipeline that will cross Afghanistan and Pakistan.

The four countries signed a gas pipeline framework agreement and an inter-government agreement in December. The next week’s discussion would also cover issues relating to liabilities of buyer and seller in case of no offtake or supply of gas, besides force major clauses.

India is also likely to propose bilateral meetings with Pakistan and Afghanistan to discuss issues related to transit fees. While a transit fee is payable to the countries through which the $7.6-billion pipeline passes, transportation charges will be levied by the consortium operating the pipeline.

Out of 90 million standard cubic metres a day (mscmd) gas that would be pushed from the Dauletabad field in Turkmenistan, Afghanistan would consume 14 mscmd, while 38 mscmd each would be taken by India and Pakistan. On India’s behalf, GAIL India would import a total of 13.87 billion cubic metres, starting 2014.

A consortium of international companies with experience in implementing such projects will operate the pipeline. The consortium would take over the project after the construction was completed, on a reimbursement of cost basis.