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Export credit agencies may play important role in financing TAPI project

Oil&Gas Materials 2 January 2018 13:01 (UTC +04:00)

Baku, Azerbaijan, Jan. 2

By Leman Zeynalova – Trend:

Construction of the Afghan and Pakistani sections of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline is expected to start soon, Muhammetmyrat Amanov, representative of Turkmengaz State Concern in the Board of Directors of TAPI Pipeline Company Limited, said in an interview with the Nebit-Gaz newspaper.

He noted that an agreement was reached between the government of Afghanistan and the Asian Development Bank (ADB) on financing the Afghan share capital in TAPI Pipeline Company Limited.

Considering that the lion's share of necessary capital investments accounts for the supply of goods and equipment of long-term production, export credit agencies may potentially play an important role in financing the project, he said.

In addition, the parties to the project unanimously confirm their commitment to it and the obligation to provide their own capital in accordance with participation shares and agreements, he added.

Amanov noted that the governments of the countries participating in the TAPI project fully support it.

He said representatives of the governments of Turkmenistan, Afghanistan, Pakistan and India are working very closely and effectively.

He added that the countries participating in the project will receive a cheaper, more economical and environmentally friendly source of energy, as well as additional revenues from gas transit.

Speaking about the criteria for selecting consultants and contractors for the project, Amanov said that first of all, they should have solid experience in pipeline designing, construction and operation, introduction of the best practices and standards into the project.

“Special attention is paid to the ecological aspect,” he added. “We followed the principle of minimum impact on the environment when choosing the route. The TAPI project in terms of technical complexity can be put on a par with other international gas pipeline projects. In this regard, it is necessary to mention successful work of our consultants – Germany’s ILF Consulting Engineers and the UK’s Allen & Overy.”

Turkmenistan started to construct its TAPI section in December 2015. The foundation laying ceremony for the Afghan section of the TAPI gas pipeline is planned to be held in the second half of February 2018.

Annual capacity of the gas pipeline will be up to 33 billion cubic meters.

Earlier, the Asian Development Bank, the European Bank for Reconstruction and Development and the Japanese government expressed their interest in financing TAPI. The Islamic Development Bank has already allocated a loan worth $700 million for Turkmenistan to construct its TAPI section.

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