India signs GSFA to join TAP project

Islamabad: A Gas Pipeline Framework Agreement (GSFA) was signed to facilitate joining of India in Turkmenistan-Afghanistan-Pakistan (TAP) gas pipeline, turning it into a 4-nation project.

Indian Oil Minister Murli Deora formally made a request at the steering committee meeting held here to permit India to join TAP, which was accepted by the parties to the project.

Later on, addressing a joint press conference with the visiting oil ministers of other three countries, Khawaja Asif categorically denied that talks on Tapi were held in Islamabad on the US pressure to block Iran-Pakistan-India (IPI) project.

He said India and Pakistan will commence bilateral talks on IPI on April 25, adding that Turkmenistan will provide third party certification in the next steering committee meeting to be held in New Delhi sometimes in September or October this year. He said Tapi was economically and commercially viable project even at an escalated cost of $7 billion.

He said the steering committee agreed to a schedule to complete pipeline work by 2010 and start of gas import from 2013. He said the pipeline would import 3.2 BCF gas from Turkmenistan which India and Pakistan will purchase on equal basis. He said that prices and other technical issues would be sorted out once initial work for the project is completed on fast track basis. India's Oil Minister Murli Deora told a questioner that New Delhi was more than serious to become a party to Tapi. He said India was also committed to remaining an interested party and he would participate with open mind and heart in talks for IPI scheduled for April 25.

The steering committee meeting on Tapi was held here from April 21-24. Petroleum Minister Khawaja Asif, Baymurad Hojamuhamedov, M. Ibrahim Adel, and Murli Deora, represented Pakistan, Turkmenistan, Afghanistan and India in the meeting respectively.

Prior to steering committee meeting, technical level discussions were held from April 21-22. Asian Development Bank (ADB) Country Director Peter Fedon facilitated the talks. He also responded to newsmen queries and said that Tapi was a project of friendship and the Asian Bank was very much involved in making its project a reality.

Turkmenistan side assured confirmation of adequate reserves of gas in Turkmenistan to support the combined demand of the buyer countries for 30 years. Afghanistan, India, and Pakistan confirmed demand for natural gas to be imported through Tapi. The meeting also discussed gas pricing.

The participants also discussed sale and purchase of gas, besides considering an updated feasibility 2004, carried out by the ADB, reflecting the project cost and techno-economic viability.

A handout issued at the briefing said the original study proposed a 1,680-km 56-inch diameter pipeline starting from Dauletabad field in Turkmenistan to Fazilka at the Pakistan-India border, passing through Herat and Kandhar in Afghanistan and Multan in Pakistan.

The project cost estimated then was $3.3 billion (in 2004 prices) which has now been updated to $7.6 billion (in 2008 prices). It said that the price increase was due to (i) sharp increase in price of steel; (ii) increase in construction cost, and (iii) increase in the cost of compressor stations. It maintained that despite a significant increase in cost estimates, the project was still considered as economically and financially viable.