Instability in Pakistan and Afghanistan may complicate TAPI

Oil&Gas Materials 26 May 2012 13:38 (UTC +04:00)

Azerbaijan, Baku, May 23 / Trend V. Zhavoronkova /

The instability in Afghanistan and Pakistan may complicate the implementation of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) project, Russian National Energy Institute General Director Sergey Pravosudov told Trend on Wednesday.

On Wednesday, Turkmenistan signed the TAPI natural gas sales and purchase agreement.

Buyers are gas companies State Gas Systems of Pakistan and India's GAIL ltd. The Afghan side was represented by its branch ministry. A Memorandum of Understanding has been signed with Kabul.

According to the expert, talks on the TAPI have been lasting for a very long time, but the parties have moved from negotiations to practical level - signing of the document.

"How realistic is that this project will be implemented is hard to say," Pravosudov believes.

He said two controversial points that relate to the issue of security still remain in this issue.

"The first point is security in Afghanistan, the second - security in Pakistan," the expert said.

In both cases, he said, the situation is not very favorable for the implementation of large investment projects.

Until this issue is resolved, the parties will not begin construction of the pipeline, and the issue, according to the expert, is unlikely to be resolved in the near future.

The implementation of TAPI, Pravosudov said, will yield additional revenues to Turkmenistan.

Ashgabat is now selling gas to Russia, China and Iran, and China plans to increase the supply of imported gas from Turkmenistan.

"As far as I know, China is paying for gas not a very attractive price - less than Ashgabat would like and in this way it is not clear whether Turkmenistan is interested in increasing the supply of gas to China," the expert said.

India, in his opinion, could act as competitive to China buyer, and then Turkmenistan could get a higher price and feel more comfortable.

The Ashgabat interstate agreement of member stated that the practical implementation of the TAPI project signed in late 2010 is the base document to promote TAPI project.

The design capacity of the pipeline is up to 33 billion cubic meters of gas per year.

The project is promoted by the Asian Development Bank. The resource base in addition to the Dovletabad field is the largest field in Turkmenistan, namely the Southern Yoloten - Osman (Galkynysh).

The length of the pipeline may reach 1735 kilometres.

At present the principle of forming an international consortium is being discussed. The issue of financing the project is also being solved.