Islamabad - Pakistan is likely to fund its portion of Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline from Gas Infrastructure Development Cess (GIDC), while negotiations are underway with international donors for funding the construction of the pipeline in Afghan territory.
The parties to the TAPI will renegotiate the gas pricing agreement and issues pertaining to delivery point of the project, official sources told The Nation here Friday. Meeting between Pakistan and Turkmenistan on the progress project was held here where both sides expressed their satisfaction over the progress made so far by TAPI Pipeline Company Limited despite the challenging coronavirus COVID-19 situation.
Special Assistant to Prime Minister on Petroleum Nadeem Babar led discussion with Turkmenistan delegation headed by Muhammad myrat Amanov, Chief Executive Officer and Chairman of the Board of Directors of TPCL (TAPI Pipeline Company Limited) on TAPI at Ministry of Energy, Petroleum Division.
Both sides also discussed Pakistan’s concerns pertaining to commercial and legal aspects. Pakistan is insisting the parties to the project for change in the agreement regarding the gas delivery point and review about the gas prices. Under the existing agreement, signed by the previous government, Turkmenistan will provide the gas to Pakistan at Turkmen-Afghan border and Pakistan will bear the gas transit loss in territory of Afghanistan. The incumbent government had expressed serious reservation to the agreement and asked Turkmenistan for amendment in it. Pakistan wants to come out of the responsibility of losses in Afghanistan territory and instead want to take the responsibility of losses within its own borders.
Pakistan has already constituted a Price Negotiation Committee for TAPI gas.
Under the project 56-inch diameter 1,680 kilometers pipeline, having capacity to flow 3.2 billion cubic feet per day (bcfd) gas, would be laid from Turkmenistan through Afghanistan and Pakistan up to Pak-India border. The cost of the project is around $ 10 billion and its financial close is expected in 2021, while it is likely to become operational by December 2023.
During the meeting Turkmenistan delegation informed that they intend to start construction activities in Afghanistan by building the gas pipeline from Turkmen-Afghan border to Herat Offtake point in Afghanistan.
The commencement of construction work in Afghanistan will immensely boost the confidence of international investors to invest in the Project. Pakistan is keenly interested in re-building international standard gas infrastructure in Afghanistan and extending full support at every level to commence such development activities in Afghanistan.
The Turkmen side assured that Pakistan’s concerns will be adequately addressed in the relevant agreements, and negotiations will start as soon as COVID-19 situation improves globally. Pakistan side expressed its readiness to finalize the matter in order to proceed to actual construction work in Pakistan in parallel with Afghanistan.The two sides also agreed to finalize the Host Government Agreement by the end of this year.
