Turkmenistan, Afghanistan, Pakistan, India sign gas pipeline deal

Discussion in 'Economy & Infrastructure' started by ejazr, Sep 21, 2010.

  1. ejazr

    ejazr Stars and Ambassadors Stars and Ambassadors

    Oct 8, 2009
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    Hyderabad and Sydney
    UPDATE 2-TAPI gas pipeline project inked-Pakistan official | Energy & Oil | Reuters

    By Zeeshan Haider

    ISLAMABAD, Sept 20 (Reuters) - Turkmenistan, Afghanistan, Pakistan and India on Monday signed the framework of an agreement to construct a gigantic pipeline pumping natural gas to South Asia, a Pakistani official said.

    The Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project, valued at more than $3 billion, has long been discussed by governments and energy companies but instability in Afghanistan has so far made its construction impossible.

    For Pakistan, the project could help avert a growing energy crisis already causing electricity shortages that have brought heavy criticism to a government now under enormous pressure from floods that have caused billions of dollars in damages.

    Turkmenistan, holder of the world's fourth-largest natural gas reserves, is keen to revive plans to build the TAPI pipeline through Afghanistan to the markets of Pakistan and India.

    The former Soviet state is looking to diversify energy sales from its traditional market, Russia, and is courting investors from the West, China and other Asian countries.

    "The petroleum ministers of the four countries have initialled the Gas Pipeline Framework Agreement in Ashgabad today," a Pakistani Petroleum Ministry spokesman told Reuters.

    SALES AGREEMENT In March, Pakistan signed a deal with Iran paving the way for construction of a much-delayed $7.6 billion pipeline pumping Iranian natural gas to Pakistan.

    The United States has tried to discourage India and Pakistan from any deal with Iran because of Tehran's suspected ambitions to build nuclear weapons. Iran denies any such ambitions.

    The Petroleum Ministry spokesman said the final TAPI agreement would be signed in the next meeting of the four countries after the formal approval of their governments.

    The ministers also initialled a gas sales and purchase agreement, the final version of which will be signed in December.

    The planned pipeline would have initial capacity for 33 billion cubic metres a year and would run for nearly 2,000 km (1,250 miles), including 735 km across Afghanistan and another 800 km through Pakistan.

    Turkmenistan has previously estimated the cost of the project at $3.3 billion. Natural gas to fill the pipeline could be drawn from the massive South Iolotan deposit, currently under development, and the existing Dovletabad field.
  3. pmaitra

    pmaitra Moderator Moderator

    Mar 10, 2009
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    EST, USA
    What if there is Indo-Pak war and there is disruption of supplies?
    • India should create enough reserves for gas (I wonder how feasible that is).
    • It will be difficult for Pakistan to disrupt supplies because it will be opposed by Turkmenistan and Afghanistan, who are stakeholders in this project and will benefit financially from it.
    • Pakistan also benefits financially, so hard business logic will prevent Pakistan from disrupting gas supplies. As a corollary, Pakistan might use the pipeline as a Political Tool to coerce India.
    • If India become a transit country to a third party, say South-East Asia, then Pakistan will have to think a lot more before disrupting supplies along this pipeline.

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