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December 8, 2018

Pakistan asked to launch TAPI construction next year

Business

December 8, 2018

ISLAMABAD: Pakistan has been asked to launch construction works on a regional gas pipeline on its side by the next year to facilitate earlier operation of an estimated $8.5 billion project signed eight years ago.

“TAPI Limited desires to have an inaugural ceremony in March 2019 in Pakistan,” Muhammetmyrat Amanov, chief executive officer of TPLC (TAPI Pipeline Company Limited), a special-purpose consortium company that was incorporated in November 2014 by Turkmenistan, Afghan Gas Enterprise (Afghanistan), Interstate Gas Service (Pakistan) and GAIL (India).

“At the ceremony it will request head of states of all four countries to attend the formality,” Amanov added.

TAPI is a natural gas trans-country pipeline project to supply gas from Turkmenistan to other three countries.

Amanov was called on Minister for Petroleum Division Ghulam Sarwar Khan.

Khan said the first inter government agreement of TAPI was signed in 2010. “Thus, this project should be completed at the earliest.”

The minister further said the total pipeline length is 1,680 kilometres from Turkmenistan through Afghanistan and Pakistan up to India border.

Turkmenistan’s state-owned company Turkmengaz was nominated as consortium leader in August 2015 with 85 percent of the project’s shareholding and Pakistan, India and Afghanistan have five percent shares each, the petroleum minister said.

A senior official of the petroleum ministry told The News that the pipeline project is dubbed as ‘peace pipeline project’ and will feed the three energy hungry countries for 30 years. This would initially transport 27 billion cubic meters (bcm) of gas a year, which would be increased to 33bcm after one year of operation. Of the supply, Pakistan and India would receive 42 percent share each with 16 percent going to Afghanistan, an official said.

Turkmenistan economy was used to heavily reliant on natural gas sale to Russia, China and Iran, but supply to Russia and Iran was stopped due to price conflicts and payment disputes. In early 2016, Russia stopped its purchase due to price conflict and supply to Iran was also stopped in early 2017 due to payment dispute.

Currently, China is the major buyer of Turkmen gas, which travels through three pipelines via Uzbekistan and Kazakhstan to China.

In 2013, China approved another new gas pipeline that was supposed to deliver 30bcm of gas annually to western China via Uzbekistan, Kirgizstan and Tajikistan, but this fourth pipeline was suspended in March 2017 due to dispute among member countries. TAPI remains a top priority to serve Turkmenistan’s economic needs.

For years, Pakistan has been suffering from energy shortage that is still haunting its economy. Besides, the country’s exports, especially of textile sector, have plunged over the last several years.

Domestic gas production is around four billion cubic feet per day (bcfd) while demand is six bcfd. Gas demand would reach up to eight bcfd by 2025.

The country is currently importing liquefied natural gas (LNG) from Qatar and Italy and is in talks with different countries to sign government-to-government LNG supply deals.

The targeted timeline of TAPI project implementation is 2021, but under an alternate plan, the participating countries would be able to complete the project in 2020.

A steering committee comprising of ministers of the four countries has already approved a plan under which the flow of gas would start in one and half year, the official added.

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