Islamic Development Bank to finance TAPI pipeline

Oil&Gas Materials 24 August 2016 17:08 (UTC +04:00)

Ashgabat, Turkmenistan, Aug. 24

By Huseyn Hasanov – Trend:

The Islamic Development Bank (IDB) will take part in financing of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline’s construction, Neutral Turkmenistan newspaper reported Aug. 24.

Economic feasibility of the TAPI project, which is based on the high demand for natural gas in South Asia, is confirmed by experts of the countries participating in the project and independent international experts testifying to the guaranteed capacity of Turkmenistan to ensure long-term gas supply via this route, said a representative of Turkmengas state concern at TAPI Pipeline Company Limited Muhammetmyrat Amanov.

This is about the giant gas field Galkynysh, which is at the initial stage of its development carried out in several stages.

Main gas supply for the interstate TAPI pipeline will be ensured thanks to the third stage of the field’s development that envisages 33 billion cubic meters of natural gas per year.

Amanov also noted that foreign companies and financial organizations were also invited to participate in the “Galkynysh-3” and TAPI gas pipeline projects. He added that Turkmengas state concern, which is responsible for the field’s development and the construction of TAPI’s Turkmen section, has announced a tender for the provision of services on project management, which will be implemented with the participation of the IDB.

Such a decision was made in order to attract experienced consulting companies and optimize the cost of equipping the third stage – the construction of two large gas treatment plants with the capacity of 16.5 billion cubic meters of tank gas per year, and the field’s industrial and social infrastructure.

“Meanwhile, our experts discuss with potential contractors – companies of Japan, Turkey, Korea and European countries – technical and commercial proposals for their compliance with technical requirements, and determine quality characteristics of materials, prices and others,” said Amanov.

Key aspects of subsidizing the project are solved with financial and credit agencies of these countries. Customer of the TAPI pipeline’s Turkmen section is Turkmengas state concern, experts of which will coordinate the construction, financing, management and operation of the pipeline.

Technical assignments for the design and construction of compressor stations, infrastructure facilities and the pipeline have already been prepared.

Tender documents are being prepared for the involvement of international financial institutions and companies in project management.

“We have regular discussions with the project participants, international companies and financial institutions to attract new investments,” added Amanov.

The main document for the TAPI, called the Ashgabat Interstate Agreement, was signed in 2010.

The groundbreaking ceremony for TAPI's Turkmen section was held in mid-December of 2015.

The annual capacity of the gas pipeline will reach 33 billion cubic meters. It is planned that the total length of the TAPI pipeline will be 1,814 kilometers. Some 214 kilometers will pass through the territory of Turkmenistan, 774 kilometers - Afghanistan, 826 kilometers - Pakistan.

The project is expected to be completed in late 2019.