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The member countries of the $7.6-billion Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project have decided to conclude the gas sales purchase agreement (GSPA) by July 31. However, no decision was taken on the crucial issue of gas pricing and transit fee.
Speaking to media persons after the steering committee (comprising ministers of the member countries) meeting, the Petroleum Minister, Mr S. Jaipal Reddy, said that, “The Steering Committee has given directions to the Technical Working Group (TWG) to finalise the GSPA by June 30 so that it can be signed by July 31.”
Asked if the there were deliberations on gas pricing and transit fee, which are key to such projects, Mr Reddy said, “No deliberation on price of gas has taken place at this stage. While gas price is a bilateral issue to be settled between the seller and the buyer, transit fee has to be bilaterally discussed between countries from where the network will pass.”
The 13th meeting of the TWG, which started on Monday, discussed various provisions of the GSPA, and will continue till Friday for resolving the outstanding issues including pricing.
The Petroleum Secretary, Mr S. Sundareshan said, “The TWG will start discussions on pricing immediately. The Government of Afghanistan has invited us for next meeting in May where further progress would be made. We have not gone into numbers now.”
The project envisages the construction of a 1,700-km long pipeline, which would originate from Turkmenistan, travel through Afghanistan and Pakistan, before entering India. It would carry 90 mscmd gas, of which, 14 mscmd would be for Afghanistan and 38 mscmd each for India and Pakistan.
The landed cost of Turkmenistan gas in India would rise considerably after payment of transit and transportation fees, as India is at the tail end of the proposed pipeline.
A transit fee is payable to the countries through which pipeline passes, while transportation charges will be levied by the consortium operating the pipeline.
The TWG also finalised the terms of reference of the Transaction Advisor, who would facilitate the formation of the consortium for execution of the TAPI project.
Apart from pricing, the other major concern is security, as the network passes through sensitive areas.
The Petroleum Minister said, “We are looking at security concerns. The transit country will take care of the safety and security of the network.”
The Asian Development Bank (ADB) has been designated as the lead development partner of the project. The target is to complete the network by 2016.
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