Two leading US-based companies have shown an interest in becoming lead financer of 1,680 kilometers Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project, a Petroleum Ministry official said. The official of the Petroleum Ministry associated with the Iran-Pakistan (IP) and TAPI gas pipeline projects told Business Recorder here on Thursday that ExxonMobil and Chevron were among the companies interested in becoming the lead financer of TAPI, which would cost $8 to $9 billions.
All the stakeholders Pakistan, Afghanistan, Turkmenistan and India on December 21 signed Transmission Advisory Service Agreement (TASA) on TAPI gas pipeline project in Ashgabat. "Inking of the TASA was one of the major steps toward construction of much needed gas pipeline project, work on which once started would take at least three years to be completed," the official added.
Talking about the IP gas pipeline project, he said that to deal with the energy demand and supply situation, the IP would initially bring 750 Million Cubic Feet per Day (MMCFD) of gas at an estimated cost of $13 per MMBTU in the country that could be extended to 1 Billion Cubic Feet per Day (BCFD), which was also essential for Pakistan.
"As far as the prices of IP and TAPI are concerned, they are almost same. The TAPI gas price is around $12 per MMBTU, while the IP gas price is $13 per MMBTU, while the current local wellhead gas price as per Petroleum Policy 2012 is in the range of $5.5 to $6 per MMBTU. There is a dire need to rationalise the commodity prices for all the sections of economy as due to high efficiency of the natural gas its prices should go up by at least 50 per cent," he said.
The sources said that four participating countries inked the agreement, which would pave the way for the construction of the 1,680km-long TAPI gas pipeline to bring 3.2 Billion Cubic Feet per Day (BCFD) natural gas to the country from Turkmenistan. Participating countries have appointed the Asian Development Bank (ADB) as transaction advisor to find a technically and financially sound company that could form a consortium to generate the finances for the TAPI gas pipeline that will cover an area of over 1,600 kilometres.
The Economic Co-ordination Committee (ECC) of the Cabinet has already approved the ADB as a service advisor for the TAPI gas pipeline following in the footprints of other countries, which had earlier given nod to the ADB to act as the advisor. Under TASA, the ADB will be charging a fee of $50,000 per month from the four countries meaning that every country will give over $12,000 per month. The gas line will provide 500 MMCFD gas to Afghanistan and 1.325 BCFD gas each to Pakistan and India. Afghanistan was earlier interested in the transit fee only, but later it signed the GSPA with Turkmenistan on July 2012 for 500 MMCFD gas. The consortium leader will pay $30 million to the Transaction Adviser on the date when the consortium leader assumes the responsibility. The gas will be imported from Yolotan-Osman gas field in Turkmenistan through TAPI gas pipeline of 56 inches.
The present cost of the imported gas from Turkmenistan hovers around $13 per MMBTU in Pakistan. To a question, he said that Turkmenistan-Afghanistan and Turkmenistan-India bilateral Gas Sales and Purchase Agreement (GSPA) were signed on May 23, 2012 followed by Turkmenistan-Afghanistan GSPA which was finally signed on July 9, 2013. The Gas Pipeline Framework Agreement (GPFA) was signed on December 11, 2010. the TAPI parties agreed to form a Special Purpose Vehicle (SPV) as TAPI Ltd with four designated gas companies from the TAPI countries and proceeded with this vehicle to undertake certain pre-project activities, including the selection of the consortium leader.
Comments
Comments are closed.