ISLAMABAD Pakistan and Turkmenistan on Monday signed a bilateral agreement over the price of gas through the planned Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline, officials said. The Gas Sales and Purchase Agreement (GSPA), which was dubbed as a historic step towards the finalisation of the $7.6 billion gas pipeline project to fuel Pakistans growing domestic and industrial needs from the Turkmen gas fields, was one of the five agreements and memoranda of understanding (MoUs) aimed at enhancing bilateral cooperation in the fields of trade, energy, media and culture. The accords were signed in Islamabad after talks between Turkmenistan President Gurbanguly Berdymuhamedov and Prime Minister Yousuf Raza Gilani. Both the leaders witnessed the signing ceremony at the Prime Ministers house. As per to GSPA, the price of the gas would be 30 percent less than the price of crude oil in the international market, the Petroleum Ministry officials said. But they said the total cost of the project would be determined after negotiating the transit fee with Afghanistan and consultation with India. Officials said that the agreement was a major milestone as the project had been almost in cold storage since its beginning, mainly because of instability in Afghanistan as the pipeline would pass through southern Afghanistan. They said the accord would help completion of the project by its deadline of 2016. We have got a good deal, in line with the international gas pricing agreements, a senior official of the ministry said. Turkmenistan has the worlds fourth largest proven reserves of gas and would pump in around 33 billion cubic meters per annum through the gas pipeline with 735-km section across Afghanistan and another 800-km section through Pakistan before culminating in India. The 1,680-km gas pipeline backed by the Asian Development Bank will bring natural gas from Turkmenistan to Multan through Afghanistan and end at the northwestern Indian town of Fazilka. Under the agreement Afghanistans share would be 500 million cubic feet per day (mcfd), Pakistan 1,325 mcfd and India 1,325 mcfd. The agreement is a follow-up to the inter-governmental agreement (IGA) signed by President Asif Ali Zardari, Afghan President Hamid Karzai, Turkmen President Gurbanguly Berdimuhamedov and Indian Petroleum Minister Murli Deora in Ashgabat on Dec 11 last year. The new accord would be followed by the signing of 'Heads of Agreement and Transportation and Transit accords, by the end of this year, Petroleum Secretary Ejaz Chaudhry said. He said the natural gas from Turkmenistan and Iran would help the country meet around 70 per cent of its shortfall. Pakistan Petroleum Minister Dr Asim Hussain said the formal signing of the agreement would take sometime because the transit fee for the pipeline in Afghanistan was not yet clear. Turkmenistan claims the transit fee (in Afghanistan) would be lower but we think it would be higher, so we have to take into account the transit fee risk factor before signing the formal agreement, he added. He claimed that the financing for the TAPI pipeline project would not be a problem although the cost of the Pakistan segment was not yet clear because the project partners had not started the process for appointing a financial adviser for the structure. Among the other accords signed on Monday, Foreign Minister Hina Rabbani Khar and Turkmen minister Rashid Meredov signed the MoU on cooperation between the foreign ministries of two countries, while Federal Minister for Information and Broadcasting Dr Firdous Ashiq Awan and Turkmen Minister for Culture Gulmurad Muradov inked the Agreement on cooperation between Associated Press of Pakistan (APP) and Turkmen News State Service. The MoU on cooperation between Pakistans Ministry of Commerce and Ministry of Trade and Foreign Economic Relations of Turkmenistan was signed by Commerce Minister Makhdoom Amin Fahim and Turkmen minister Byar Abayev. An MoU on cultural cooperation was inked by Foreign Minister Hina Rabbani Khar and Turkmen Culture Minister Gulmurad Muradov. The GSPA relating to the TAPI gas pipeline was inked by Managing Director of Inter-State Gas System Mubeen Saulat and Chairman of Turkmenistan Gas Trade Concern Amanali Hanalyev. The demand for natural gas in Pakistan has increased by almost 10 percent annually from 2000-01 to 2007-08, reaching around 3,774 MMCFD, against the total production of 3,200 MMCFD. According to the Ministry of Petroleum, the demand in 2008-09 soared to 4,731 MMCFD while production was 4,528 MMCFD, indicating a shortfall of 203 MMCFD. Petroleum Secretary Ejaz Chaudhry, when asked about the reports of slow progress on the $7.5 billion dollars Iran-Pakistan-India (IPI) gas pipeline project, strongly dispelled the impression and said the project was heading as per the targets set. On the contrary we are planning to have it up and running by July 2014, much before the December 2014 deadline, the secretary said. He said construction of the 2,775-km pipeline was likely to start by March next year. He said around 900 km work on the Iranian side had been completed, with around 200 km long still remaining. The 48-inch diameter gas pipeline will traverse through Balochistan, Sindh, Khuzdar and Multan and will initially have a capacity of 22 billion cubic meters annually, expected to increase to 55 billion cm. It will provide 65 per cent gas to Sui Northern, while 35 per cent will be pumped into the Sui Southern network. The TAPI project was initially designed to provide Turkmen gas to Pakistan through the volatile Afghanistan in an agreement signed in May 2002 in Islamabad and was known as Turkmenistan-Afghanistan-Pakistan pipeline project. India was later invited to join in April 2008. The four countries signed the framework of an agreement to construct the gigantic pipeline pumping natural gas to South Asia on September 20. Under the agreement, the four nations will commit to provide government support, including security for the pipeline. According to the initial plan, the gas pipeline was to run alongside the Herat-Kandahar Highway in Afghanistan and pass through Chamman-Zhob-DG Khan-Multan in Pakistan. But Pakistan has sought guarantees of gas supply from Turkmenistan and proposed a route that closely follows the Afghan-Iran and Pakistan-Iran borders and is shorter and safer. President Asif Ali Zardari Monday said that Pakistan is keen to take Pak-Turkmenistan bilateral ties to greater heights and enter into a comprehensive partnership for peace and development with Turkmenistan as the two countries have immense economic complementarities. During one-on-one meeting with President of Turkmenistan Gurbanguly Berdimuhamedov followed by delegation level talks, President Zardari said that Turkmenistan has the capacity to meet Pakistans growing energy requirements whereas Pakistan can provide trade corridor to Turkmenistan, overland and through our seaports. The President highlighted the existing cordial bilateral relations and called upon the need for the two countries to translate their close ties into economic partnership for the socioeconomic development of the people of the two countries. Briefing the media about the meeting, spokesperson to the President Farhatullah Babar said that the President said, We need to carry forward the legacy of friendship laid by Shaheed Mohtrama Benazir Bhutto and further strengthen our mutual cooperation most notably in the economic terms which at present does not commensurate with the existing potential between the two countries. The President expressed satisfaction over the current progress on the Turkmenistan-Afghanistan-Pakistan-India gas pipeline project and called for early realisation of the Project. The project, he said, has the potential to spur growth and transform the regions economic landscape. The spokesperson said that the President recalled that it was during the Pakistan Peoples Party government that the gas project was initially conceived and expressed pleasure to revive the project and see the project make headway. He proposed that the two countries might enter into currency swap agreement, preferential tariff arrangements and a free trade agreement to enhance bilateral trade and investment ties. The President urged for establishing rail and air links between Pakistan and Turkmenistan to the mutual benefit of the two countries. The spokesperson said that the President recalled his visit to Ashgabat last year and said that the challenge before the two sides was to give tangible shape to measures aimed at exploiting each others economic potentialities. The President called upon business communities, trade facilitation bodies and chambers of commerce and industries of the two countries to establish and advance linkages so as to further enhance bilateral trade. The President urged the need to encourage regular meetings of the recently activated joint Inter Governmental Commission and said that the commission should find ways to expedite finalization of pending agreements between he two countries. The President said that it was satisfying to note that Turkmenistan was utilizing various training courses offered by Pakistan in various fields and wished to further broaden the scope of this cooperation. Discussing regional situation, the President Zardari said that, Pakistan due to its geo-strategic location was an important regional player and has always worked for promoting regional stability and peace. He said that Pakistan has abiding interest in the peace and prosperous Afghanistan. Pakistan has always called for an Afghan-led and Afghan-owned solution and will continue to support all efforts to bring in peace and development in the neighboring country, he said. Afghanistans security directly impacts the security of all of its immediate neighbors, including Pakistan, he added. The Spokesperson said that President of Turkmenistan Mr. Gurbanguly Berdimuhamedov expressed his gratitude to the President for the warm welcome and invited him to pay an official visit to Turkmenistan. The President accepted the invitation to visit Turkmenistan. The dates of the visit will be agreed through diplomatic channels. From Turkmenistan side those who were present during the delegation level meeting included among others Mr. Rashid Meredov, Deputy Chairman of the cabinet of ministers, Mr. Hojamuhammet Muhammedov, Bavmurat Hojamuhammet, Orazmurat Gurbannazarov, Deryageldi Orazov, Byar Abayev, Bayramgeldi Nedirov, Gulmurad Muradov, Berdiniyazov Sapar, Turkmen ambassador in Pakistan and other senior officials. From Pakistan side, the President was assisted by Makhdoom Amin Fahim, Chaudhry Ahmad Mukhtar, Dr Abdul Hafeez Sheikh, Hina Rabbani Khar, Dr Firdous Ashiq Awan, Senator Rehman Malik, Senator Dr Asim Hussain, Syed Naveed Qamar, Makhdoom Shahabuddin, Salman Faruqui, Spokesperson Farhatullah Babar and Pakistans Ambassador in Turkmenistan Tassaduq Hussain.