The Cabinet of India has approved the pricing agreement between the largest GAIL local gas company and Turkmen Turkmengaz gas production and gas distribution company regarding energy supplies via Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline, ITAR-TASS reported.
The contract will be signed next week, the Business Standard newspaper reported today, and will be an important step towards the implementation of the project.
Agreement on purchase and sale of gas is to be signed on a bilateral basis between all participants and will include, inter alia, the price for Turkmen gas, which, according to the publication, may be about $10 per one million British thermal units (mmBtu) . The transit fee was previously fixed at 50 cents per one million British thermal units.
The length of the TAPI gas pipeline, which should become operational in 2018, is more than 1,600 kilometers (144 miles - in Turkmenistan, 735 km - in Afghanistan, 800 km - in Pakistan). The pipe will run from the southeast Turkmenistan to Afghanistan, then - along the road between the cities of Herat and Kandahar to Pakistan and eventually through the cities of Quetta and Multan to reach India (Punjab).
Turkmenistan has the fourth largest natural gas reserves in the world after Russia, Iran and Qatar. Framework agreement on TAPI gas pipeline project was previously signed by the sectoral ministers of four countries. The Asian Development Bank in 2008 estimated its cost at $ 7.6 billion. It will finance one-third of the project's cost.
The pipeline's capacity will exceed 33 billion cubic meters of gas per year or 90 million cubic meters per day, of which 14 million would be bought by Afghanistan and 38 million - India and Pakistan.