TAPI's search for lead consortium partner continues

The search for a global energy company as the lead consortium partner for the ambitious TAPI pipeline, which proposes to transport Caspian Sea gas from Turkmenistan through Afghanistan and Pakistan to India, is facing a rough weather due to the terror-torn terrain of the project.

“Despite several roadshows across the world, none of the global companies is ready to take up the pipeline will be laid through a terror-hit area. Our search for a leading consortium partner is continuing,” a senior petroleum ministry official said, requesting anonymity.

There were reports that the four countries — now working under a special purpose vehicle (SPV) called TAPI Ltd — would sign a transaction advisory deal with the Asian Development Bank (ADB) this week to raise money for the project. The overall cost of the project is expected to be $9 billion (Rs 54,220 crore today). When contacted, an ADB spokesperson refused to comment on the issue.

Till now, roadshows for the projects were held in Singapore, New York and London, in which companies like Malaysia’s Petroliam Nasional Bhd, Singapore’s Temasek Holdings (Pvt) Ltd, Chevron Corp, ExxonMobil, BP Plc, Royal Dutch Shell and British Gas participated.

Another major reason for roadshows not generating much interests is believed to be Turkmenistan’s decision not to give participating stakes for the companies in hydrocarbon fields.

The Indian government had cleared the approval to form the Dubai-based SPV and state-run GAIL (India) Ltd’s participation in it in February this year. “GAIL has executed a gas sales agreement with TurkmenGaz for importing 38 mscmd (million standard cubic metres a day) of natural gas through the Turkmenistan-Afghanistan-Pakistan-India (Tapi) pipeline for a 30-year period,” a GAIL India official said.

“Three agreements--inter-government agreement, gas pipeline framework agreement (GPFA) and gas sales and purchase agreement (GSPA)--have been signed up till now. The countries reached a broad agreement on transit fee, too,” said the official, who also did not want to be named. GAIL would invest $5 million in the project.

The 1,680-km pipeline route will start from the South Yolotan-Osman field in Turkmenistan, passing through the troubled Herat, Helmand and Kandahar regions in Afghanistan via Quetta and Multan in Pakistan and finally ending at Fazilka (Punjab) in India.

The agreement signed by the countries ensure the delivery of 90 mcmd of gas from Turkmenistan to South Asia with 38 mcmd each going to Pakistan and India and 14 mcmd for Afghanistan. The consortium leader would build and operate the project, apart from arranging the funds and ensuring the delivery of gas.