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September 16, 2019

Pakistan assures all-out support to TAPI project


September 16, 2019

ISLAMABAD: In spite of tension between Pakistan and India on the Indian Occupied Kashmir (IOK), Islamabad has assured Turkmenistan of its all-out support to the peace gas pipeline [TAPI], The News has reliably learnt.

The pipeline will pass through Pakistan to India, while construction activities on the Pakistani portion would start in the first quarter of 2020. Islamabad has recently assured Turkmenistan it would take up economic and political issues with New Delhi separately. Pakistan would also support the execution of offshore gas pipeline that would transport natural gas from the Russian energy giant Gazprom’s sources in the Middle East to Pakistan, India, Bangladesh and then to China.

In the backdrop of tension between the two Asian neighbors over the IOK, some quarters including Turkmenistan and Russia had expressed reservations about the fate of these projects. Pakistan had however assured them that the execution of these projects would not face any hindrances, a senior official said.

State-run energy firm Inter State Gas Systems (ISGS) that has mandate to implement oil and gas pipeline projects in Pakistan is working on pipelines including Turkmenistan-Afghanistan-Pakistan India (TAPI), North-South Pipeline and Offshore Gas Pipeline. Besides, the firm is also working on building underground strategic gas storages.

TAPI being dubbed ‘peace pipeline’ will bring natural gas from the Gylkynish and adjacent gas fields in Turkmenistan to Afghanistan, Pakistan and India.

The ADB is acting as the facilitator and coordinator for the project. It is proposed to lay a 56-inch diameter 1,680 KM pipeline with design capacity of 3.2 billion cubic feet of natural gas per day (Bcfd) from Turkmen gas sources. The project will cost around $10 billion and India and Pakistan will get 1.3 Bcfd each while the remaining would be for Afghanistan.

The US supports the project to meet the energy needs of Afghanistan, Pakistan and India. This is a regional energy infrastructure project and would help ease tensions between the neighboring countries due to inter-dependence.

The Turkmen government also plans to lay an optic fiber network parallel to TAPI gas pipeline and then to China. The Turkmen government has already completed rail network up to the border of Afghanistan.

Official sources said construction work had already started in Turkmenistan and was expected to start soon from Turkmen-Afghan border to Herat section. Some European banks and firms had been shortlisted for provision of pipeline material and Engineering, Procurement and Construction (EPC) contract.

Another project of offshore gas pipeline is also under study, and in February this year, Pakistan and Russia had signed the Inter Corporate Agreement for laying more than 1500-Km off-shore gas pipeline aimed at transporting natural gas from Russian Gas Company Gazprom’s sources in the Middle East to Pakistan and south Asian countries and China. Only, Pakistan can receive up to one billion cubic feet of gas per day through this pipeline. The project’s completion would take three to four years. It is worth mentioning that this project has been planned by the Russian government to capture Pakistani market. Russia has nominated Gazprom for implementation of the project. Pakistan’s cabinet has permitted the company to conduct feasibility study at its own cost and risk.

Reportedly, Indian Premier Narendra Modi had also assured Russian President Vladimir Putin that India had no objection on this project. Pakistani authorities have also assured their support for execution of TAPI and offshore gas pipeline projects which will meet the energy requirements of this energy starved region.

Russia holds huge gas deposits in Bahrain, Qatar and other middle-eastern countries and had offered Pakistan and India gas exports by laying an offshore pipeline that would be passing through Gwadar.

As Pakistan’s energy demand is multiplying with the under China Pakistan Economic Corridor (CPEC) and industrialization of the country, so it would meet its demands to a large extent. Besides, it would place Pakistan on the world map as transit country for offshore gas pipelines.

The under construction China-Pakistan Economic Corridor (CPEC) is making the region more important for the foreign investors and with the passage of time, the demand for energy sources is anticipated to increase manifold in years to come.

The Special Economic Zones (SEZs) are being constructed under the CPEC. Tax and duty exemptions will also be provided to investors that will help boost industrialisation in the country. The offshore gas pipeline will meet the energy needs of industries being set up in the economic zones along CPEC route.

The government is also working on North-South Pipeline project that will run from Karachi to Lahore to transport imported gas. At present, two LNG terminals are operational in the country and the government has allowed five more private sector companies to build LNG terminals at Port Qasim that would also require pipeline to pump from Karachi to Lahore.

This project will be executed by the Russian firm on government to government deal under BOOT model wherein the Russian firm will provide funding for this project. This project has been delayed due to sanctions but the work on it is being pursued now. The Intergovernmental Commission (IGC) between Pakistan and Russia will meet soon to review project's progress.

For building underground gas storages, the Asian Development Bank (ADB) has committed provision of technical assistance for conducting its feasibility study. The government has identified some depleted gas fields with huge storage capacity that could store gas, MD ISGC Mobin Saulat said, adding that Iran and India also had underground storages and Pakistan also needed this facility.