GAIL to hold stake in TAPI as global firms shun 4-nation proj

GAIL India Ltd will hold stake in the four-nation company being set up to build the Turkmenistan -Afghanistan-Pakistan-India (TAPI) gas pipeline as global firms have so far shunned the USD 7.6 billion project.
The four nations planning the TAPI pipeline last week decided to co-own the project and a joint venture company with participation from each country would be set up to build and operate the over 1,800 line.
"Turkmenistan's state-owned TurkmenGaz has said it will be the leader of the consortium and will take a minimum 51 per cent stake," Oil Minister Dharmendra Pradhan told reporters.
The work on TAPI pipeline is yet to commence as the four nations have not succeeded in finding a reputed international firm that could lead the consortium to construct and operate the 1,800-km long pipeline.

Pradhan said at the 22nd Steering Committee meeting of TAPI project in Ashgabat last week it was agreed by the four nations to make investment in the project subject to techno-commercial viability, shareholders agreement and investment agreement.
Officials from the state companies of the four nations will meet in Dubai on August 18-19 to discuss equity participation as well as technical feasibility, he said.

French giant Total SA had initially envisaged interest in leading a consortium of national oil companies of the four nations in the TAPI project.
However, it backed off after Turkmenistan refused to accept its condition of a stake in the gas field that will feed the pipeline.

"Their (Turkmenistan) law does not allow giving stake in upstream fields. So we now have this arrangement," he said adding GAIL will take equity from Indian side in the project consortium.
"How much equity will be decided during talks," he said.
Since the four state-owned firms, including GAIL of India, neither have the financial muscle nor the experience of a cross-country line, an international company is needed to build and operate it in hostile territories of Afghanistan and Pakistan.
The TAPI pipeline 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.

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.