Turkmenistan hopes to conclude a long-awaited gas price deal with Pakistan and India during imminent talks on construction of an ambitious project to build a pipeline through Afghanistan, a government official said on Thursday. Turkmenistan, which holds more than 4 percent of the world's natural gas reserves, expects within the next few months to host a new round of talks with participants in the US-backed TAPI project to link Turkmen gas fields with India, the source said.
His comments followed a letter from Indian Prime Minister Manmohan Singh, published by several state-run national newspapers on Thursday, hailing "great progress" since the signing of a preliminary agreement in December 2010. Singh's letter, published in Russian, was sent to mark the 20th anniversary of diplomatic relations between India and Turkmenistan, a former Soviet republic bordering Iran and the Caspian Sea which gained independence in 1991.
The idea of the TAPI pipeline, an acronym formed from the initials of the four countries through which it would pass, was first raised in the mid-1990s but construction has yet to begin. The proposed 1,700-km (1,056-mile) pipeline could carry 1 trillion cubic metres of gas over a 30-year period, or 33 billion cubic metres a year. But the route, particularly the 735-km (450-mile) Afghan leg, presents significant security challenges and will require Pakistan and India to agree on volumes and price. Participants must also secure funding for the project. The preliminary agreement signed by the TAPI countries contained no specific provisions for security, finance, volumes or price. Turkmenistan's unflinching policy of selling gas at its own borders means Pakistan and India would need to settle transit fees with each other and Afghanistan.
"According to the preliminary agreement, discussions between the participating countries should take place before summer," the government source told Reuters, on condition of anonymity. "Possibly, this could include the signing of a gas sales purchase agreement."
BP data show Turkmenistan's natural gas reserves equal to those of Saudi Arabia and behind only Russia, Iran and Qatar. The Central Asian state supports the pipeline as part of its plans to diversify sales from Soviet-era master Russia. It aims to supply natural gas from its Galkynysh field, better known by its previous name, South Iolotan, to Pakistan and India. British auditor Gaffney, Cline & Associates has said the gas field is the world's second-largest.
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