TAPI countries reiterate need to implement gas pipeline

Ministers from Turkmenistan, Afghanistan, Pakistan and India on Thursday expressed the need to own and implement the much-delayed $7.6 billion TAPI gas pipeline project traversing four countries.

"Attended TAPI Ministerial meeting; agreed that the 4 countries need to own and implement the gas pipeline project," Indian Petroleum Minister Dharmendra Pradhan tweeted from Turkmenistan, which is hosting the 22nd steering committee meeting of TAPI in its capital Ashgabat.

"Met Dy PM of Turkmenistan; welcomed his proposal to lead the project & agreed for early implementation of TAPI project," he said in an another tweet.

"Held talks with Minister of Mines & Petroleum of Afghanistan; agreed to take forward TAPI pipeline project," he added.

The steering committee meeting is taking place in the wake of Prime Minister Narendra Modi's visit to Turkmenistan last month, the petroleum ministry said in a release here.

Maenwhile, India Ratings said last month that the TAPI pipeline project is unlikely to be ready by its proposed timeline of 2018 and India "will continue to rely on domestic gas and imported LNG".

The ratings agency, in a report, cited four major issues confronting the pipeline: the seller's willingness to sell gas at a price feasible for the ultimate buyer, quantum off-take assurance by end-consumers, funding of the pipeline and geopolitical risks associated with its construction and operation.

The TAPI pipeline is slated to have a carrying capacity of 90 million standard cubic metres a day (mmscmd) gas and will be operational in 2018. India and Pakistan would get 38 mmscmd each, while the remaining 14 mmscmd will be supplied to Afghanistan.

India Ratings said many user industries may find the gas unviable for their operations if the landed price of gas from the pipeline in India were to be high at $10-12 per million British thermal unit, which is more than double the domestic gas price.

Financial closure for the project that is estimated to cost nearly $7.6 billion would involve significant support from participating countries including equity participation and guarantees for the project debt because "construction and operation of the pipeline, which will pass through difficult and conflict-affected geographies in three countries, carry major credit risks".