Turkmenistan signs first contracts for Asia pipeline

24-May-2012 Intellasia | AFP | 10:30 AM Print This Post

Turkmenistan on Wednesday signed agreements with India and Pakistan to deliver gas through a new pipeline that will transit Afghanistan, the first contracts in the ambitious project.

The 1,700-kilometre (1,050-mile) TAPI pipeline aims to transport more than 30 billion cubic metres of gas annually from Turkmenistan to energy-hungry consumers in Pakistan and India as well as relieving shortages in Afghanistan.

The sale-purchase agreements for the yet-to-be-built pipeline were signed at a ceremony on the sidelines of the annual Turkmenistan oil and gas congress in its Caspian Sea resort of Avaza, just outside the city of Turkmenbashi.

They were inked by the head of the state gas company Turkmengaz Sakhatmurad Mamedov with representatives of India’s Gail Ltd and Pakistan’s Inter State Gas System.

Two workmen stand next to a symbolic piece of a gas pipeline in Turkmenabat (AFP/File)

“Today we are witnesses of a historic event, not just of regional but of world scale,” said Turkmenistan deputy prime minister Baimurat Khodzhamukhamedov.

Turkmenistan and Afghanistan signed a memorandum of understanding for cooperation in the gas sector but no contract. Khodzhamukhamedov said negotiations were continuing with Afghanistan on the price of deliveries.

The TAPI (Turkmenistan-Afghanistan-Pakistan-India) natural gas pipeline, which is backed by the Asian Development Bank (ADB), is regarded with suspicion as a wildly ambitious pipedream by some analysts.

Much of the pipeline will go through Afghanistan which neighbours both Turkmenistan and Pakistan but remains wracked by violence and instability.

The pipeline’s route would take it straight through the region’s most turbulent locales, including conflict-torn Helmand and Kandahar provinces in Afghanistan as well as Quetta in Pakistan, where tribal unrest is common.

But India’s Oil minister S. Jaipal Reddy said that his fast-growing nation was waiting impatiently for the pipeline to be ready, noting that India’s energy demands would quadruple by 2017.

Afghanistan’s Mining minister Wahidullah Shahrani said that the project will “spread peace and help our region flourish.”

Financial details and precise volume details of the contracts were not disclosed but according to the ADB, the contracts will lead to the supply of up to 90 million cubic meters of natural gas a day through the pipeline.

Turkmenistan is also being courted by the West and China for its immense gas reserves which, according to British auditors Gaffney, Cline and Associates, are the second largest in the world.

The country is also keen on diversifying its export routes which remain dependent on its former Soviet master Russia with whom it has had occasionally prickly relations.

It has already begun exporting gas to China through a pipeline that was opened by China’s President Hu Jintao in December 2009.

According to the ADB, the TAPI in 2008 was estimated to cost at least $7.6 billion (6.0 billion euros) and the partners now face the task of attracting commercial partners to build, finance, and operate the pipeline.

But the project does enjoy the support of the United States, which is keen to deter subcontinent states from dependency on energy supplies from its arch foe Iran.

Crucially, the pipeline project also signals a further warming of economic ties between the traditional rivals India and Pakistan.

“Each country stands to gain, making this not only the ‘Peace Pipeline,’ but a pipeline to prosperity as well,” said Klaus Gerhaeusser, director general of the central and west Asia department at the ADB. -By Anton Lomov

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