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bne
February 11, 2013
The Indian cabinet has voted to allow state owned oil and gas company GAIL to make an initial investment in the planned Turkmenistan-Afghanistan-Pakistan-India gas pipeline.
GAIL will make an initial investment of $5m into a special purpose vehicle set up to carry out the project, which will carry gas from Turkmenistan to southern Asia, according to reports in the Indian press. In September, the four governments agreed to a Turkmen proposal to set up the company with shared capital of $20m to carry out a feasibility study and design the pipeline.
The TAPI participating states are aiming to start construction of the pipeline, which was first proposed in 2006, by the end of the year. Ashgabat says that the Turkmen section of the pipeline can be completed by three years.
Agreements have already been signed on the volume and pricing of gas to be exported. Turkmenistan will supply a total of 33bn cubic metres (cm) through TAPI, of which India and Pakistan will each receive 14bn cm and Afghanistan the remaining 5bn cm.
In January, government officials from Turkmenistan and India agreed to "fast track" the project. The participants hope to commission the pipeline by 2018, to help meet the growing demand for energy in India and Pakistan, although the security situation in Afghanistan is a continuing obstacle to starting construction.
Part of the pipeline's cost - estimated at up to $12bn - will be footed by the four participating countries and the Asian Development Bank, with international investors to be invited to contribute the rest. A series of roadshows were launched in autumn 2012 to raise that finance, with Turkmen officials claiming that companies including Chevron, Exxon Mobil, BP, BG Group, RWE and Petronas have expressed interest.
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