Turkmenistan signs gas sale pact with India, Pak

New Delhi, May 24 (PTI) Kicking-off work on the long discussed US-backed Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline, India and its new energy partners on Wednesday signed agreements that will pave way for laying of the 1,680-km line. Turkmenistan -- which holds more than 4 per cent of the world's natural gas reserves -- signed agreements to sell gas to India and Pakistan through the USD 7.6 billion pipeline at the Caspian Sea resort of Avaza. Describing signing of the Gas Sales and Purchase Agreement (GSPA) as "no-ordinary event", India's Oil Minister S Jaipal Reddy said the signing was "a triumph of multilateralism, regional cooperation and economic integration". The 1,680-km TAPI pipeline will have a capacity to carry 90 million cubic metres a day (mmcmd) gas for a 30-year period and will be operational in 2018. India and Pakistan would get 38 mmcmd each, while the remaining 14 mcmd will be supplied to Afghanistan. Besides Reddy, the GSPA, signed by national oil companies of the four nations at the Caspian Sea resort of Awaza in Turkmenistan, was witnessed by Turkmenistan Oil Minister B Nedirov, Pakistan's Petroleum Minister Asim Hussain and Afghanistan's Minister of Mines Wahidullah Shahrani. "Without a doubt, the economic benefits of the TAPI gas pipeline will be immense for our energy-starved economies. The flow of natural gas will bring in industrial and economic development in our countries," Reddy said. Stating that in and inter-connected and globalising world, economics shapes politics, he said: "It is our belief that the TAPI gas pipeline will transform the politics of this region". "Hopefully, the spin-off benefits of this pipeline will encourage us to emphasise trade and investment issues over contentious political issues and enable us to build trust and confidence among ourselves as neighbours and partners in progress," he said in apparent reference to the frosty ties India has had with its neighbour Pakistan. The US is backing the TAPI pipeline as an alternative to the Iran-Pakistan-India line in its efforts to choke Tehran financially over its suspected nuclear weapon programme. While New Delhi had reached agreements on price and transit clauses for the IPI pipeline, TAPI will be the first transnational line for which it will be signing a GSPA. Besides meeting its energy needs, TAPI would be test of peace between India and Pakistan. More importantly, it will test Islamabad's resolve to normalise trade with its neighbour by allowing safe passage of the gas through the 800 km section of the pipeline passing through its territory. Also, the 735-km leg through the Afghan provinces of Herat and Kandahar would presents significant security challenges. 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. Sources said India will pay for the gas only when it is delivered to it at its border. Afghanistan and Pakistan would sign host country agreements to provide security to the pipeline. In exchange, they would get USD 0.50 per million British thermal unit as transit fee from India. The GSPA was signed by B C Tripathi, Chairman and Managing Director of state-owned gas utility GAIL India Ltd and Sahatmurad Mamedov, Chairman, Tukmengaz, the national oil company of Turkmenistan. PTI