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June 7, 2021

$8 bn TAPI gas line project: Pakistan seeks gas delivery at its own border

ISLAMABAD: Pakistan has again asked Turkmenistan that Islamabad will have intake of 1.35 billion cubic feet (bcf) gas per day under the $8 billion trans-nations TAPI gas pipeline project at its own border and not under prices settled under the existing GSPA (gas sales purchase agreement).

“We will not get hold of the gas at border of Afghanistan shared with Turkmenistan and will not bear the gas transit risk in the territory of the war-ravaged country of Afghanistan, instead we will get the gas at our own border shared with Afghanistan and more importantly we have asked the authorities concerned in Turkmenistan to review the gas prices till the TAPI project comes on stream,” SAPM on Power and Petroleum Tabish Gauhar told The News.

To a question, he said Pakistan has been informed that the TAPI gas line will be operational by 2026 at Kandahar, Afghanistan. “In case of a halt of gas supply to Pakistan in the wake of any subversive activity in Afghanistan, Pakistan will never take the risk at any cost. This has been cleared to Turkmenistan authorities. And the financial commitment on behalf of Pakistan is to start when Turkmenistan ensures the gas supply on the Pakistan border, not at the border of Afghanistan shared with Turkmenistan.”

According to sources, Nadeem Babar, ex-SAPM on Petroleum, had also raised the same issue with Turkmenistan, stressing the provision of gas at the Pakistan border not at the Turkmenistan border shared with Afghanistan. Pakistan has already raised with Turkmenistan the issue of reviewing the gas prices,arguing that the gas price formula under which the gas prices of every buying country (Afghanistan, Pakistan and India) has been worked out is too much complicated and if the new gas price is worked out while keeping in view the existing gas price formula, the gas price that Pakistan gets is more costly even than the existing LNG price. “So we want Turkmenistan to review the gas price formula prior to the much-awaited groundbreaking of laying down the portion of the TAPI pipeline in the territory of Pakistan.”

The three buyer countries Afghanistan, Pakistan and India had inked the gas sales purchase agreement with Turkmenistan on a bilateral basis. Now all the buyer countries want to unfold their prices and want renegotiations. The TAPI gas pipeline project aims to 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 1,680km pipeline with a design capacity of 3.2 billion cubic feet of natural gas per annum (Bcfd) from Turkmenistan through Afghanistan and Pakistan up to Pak-India border.

There are two phases of this project: the first phase is free flow phase with estimated cost of $5 billion to $6 billion while the second phase is installation of compressor stations at a cost of $1.9 billion to $2 billion. The civil works of the project have already commenced in Afghanistan after the project’s groundbreaking (Afghan section) was held two years back. Afghanistan will be having the gas under TAPI 500 mmcfd, Pakistan 1.325 bcfd and India 1.325 bcfd too. The Turkmen gas company being the consortium leader for the TAPI Project is to contribute up to 85% of equity, and the rest of TAPI members namely Afghanistan, Pakistan and India would take 5% each equity share.