October 12, 2008

TAPI gas pipeline project to begin in 2010 – Report

Xinhua reported that oil ministers from Turkmenistan, Afghanistan, Pakistan and India have signed a draft framework, agreeing to start construction work of the TAPI gas pipeline project in 2010.

After 2 day talks in Islamabad, the ministers from the 4 nations told a joint press conference that the construction work on the delayed TAPI pipeline project will be inaugurated in 2010.

The talks on Turkmenistan Afghanistan Pakistan gas pipeline project have been underway since 2002. In 2006 India was invited as an observer to the project, funded by the Asian Development Bank. This is the first time that India is participating in talks on the pipeline as a full fledged member.

The project cost has risen to USD 7.6 billion from originally estimated USD 3.3 billion in 2004. The price increase was due to sharp increase in price of steel, increase in construction cost and increase in the cost of compressor stations.

Turkmenistan side stated that audit report on certification of gas reserves will be available latest by September 30th 2008. Turkmenistan also agreed to supply the gas specification in one month.

The four countries agreed to continue further discussion on the development and implementation of the project with renewed vigor on various matters. The parties agreed that the TWG may prepare a draft of the gas supply and purchase agreement and the next meeting of the TWG may be held in New Delhi at an early date. They have agreed to form a consortium of investors to undertake the detailed feasibility study and further actions.