Initial investment agreement for TAPI pipeline signed

The agreement to operate the 1,814 km long gas pipeline was signed last month in Istanbul

The four nations that are part of the $10 billion Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project have signed an initial investment agreement to turn the deal into a reality, according to a media report on Friday.

The agreement to operate the 1,814 kilometre-long gas pipeline was signed last month in the Turkish capital Istanbul by representatives of the four nations, The Express Tribune reported.

It said that already a company was registered in November 2014 in which Afghanistan, Pakistan and India have 5 per cent shareholding each and the remaining 85 per cent stake are held by Turkmenistan.

From India's side, state-owned GAIL India Ltd was to pick 5 per cent stake in the international consortium, whereas from Pakistan side Interstate Gas Systems (ISGS) and Afghanistan's Afghan Gas Enterprise (AGE), were to take 5 per cent stake each in the project.

The investment agreement pertains to the 5 per cent shareholding of each of the three gas-importing countries, which means an initial investment of around $200 million.

"We have initialed an investment agreement in Istanbul and the final deal will be signed soon," ISGS Managing Director Mobin Saulat was quoted as saying by the paper.

The ground breaking for the TAPI pipeline, a scheme aimed at easing the energy deficit in South Asia, was performed in December last year in Turkmenistan.

The TAPI pipeline will have a capacity to carry 90 million standard cubic metres a day (mmscmd) gas for 30 years and is planned to become operational in 2018. India and Pakistan were originally to get 38 mmscmd each while the remaining 14 mmscmd was to be supplied to Afghanistan.

But Kabul is now willing to take only 1.5-4 mmscmd so the share of India and Pakistan will go up to 43-44.25 mmscmd each, he said.

TAPI will carry gas from Turkmenistan's Galkynysh field, better known by its previous name South Yolotan 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.

On December 13, Turkmenistan began work on the 214 km section of the pipeline in its territory. The pipeline will travel 773 km in Afghanistan and 827 km in Pakistan before touching the Indian border.