India likely to extend TAPI pact deadline

Ministerial discussions between the four countries to start tomorrow.

India is likely to extend the deadline for signing a gas sales and purchase agreement for the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline. Under the gas transportation agreement, signed by the four countries, the GSPA between India and Turkmenistan had to be signed by April 2011.

The change in deadline would be done through an amendment to the transportation agreement. Technical groups from the four countries are currently negotiating on the finer points of pricing and structuring of the project.

“The groups will conclude the discussions by Wednesday. Ministerial-level discussions are scheduled to start in New Delhi on Thursday,” said a senior petroleum ministry official who did not want to be quoted.

Representatives of the Asian Development Bank, one of the financial backers of the project, are also part of the ongoing discussions on the $7.6-billion TAPI pipeline project. In December last year, the four nations met in Turkmenistan to sign an inter-government agreement and a gas pipeline framework agreement.

The question of reviving talks on an early implementation of TAPI pipeline for petroleum products had come up for discussion during the visit of Indian Prime Minister Manmohan Singh to Kazakhstan early this month.

Securing gas from external sources has become crucial for India as the nation is facing a sharp demand for gas from sectors like power and fertiliser while no major increase in domestic production is lined up. The TAPI project envisages to build 1,680 km of pipeline with a total gas capacity of 90 million standard cubic metres per day (mscmd).

Out of 90 mscmd gas that would be pushed from 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 be importing a total of 13.87 billion cubic metre natural gas, starting 2014.

A rival project for transporting gas from Iran to India through Pakistan through another transnational pipeline has been stuck on the drawing board for over a decade now over concerns regarding safe passage of gas through the Pakistani territory.

While a transit fee is payable to the countries through which the TAPI pipeline passes, transportation charges would be levied by the consortium operating the pipeline. A consortium of international companies with experience in implementing such projects would operate the pipeline. The consortium would take over the project after the construction is completed, on reimbursement of cost basis.