Framework accord to launch TAPI gas project in 2010
By Asim Hussain

ISLAMABAD—The 10th Steering Committee of Ministers from Turkmenistan, Afghanistan, Pakistan and India on Thursday agreed to start construction work on much delayed TAPI Pipeline Project in 2010.
This was stated at a joint press conference by Minister for Petroleum and Natural Resources, Khawaja Muhammad Asif, Turkmen Minister for Oil and Gas Industry, Dr. Baymurad Hojamuhamedov, Afghan Minister of Mines, Mohammad Ibrahim Adel and Indian Minister for Petroleum and Natural Gas, Shri Murli Deora here after the conclusion of Steering Committee meeting held here.
The second meeting of the Technical Working Group (TWG) of the four countries was also held. The discussion were facilitated by a team of the Asian development Bank (ADB) led by Country Director Peter Fedon. The gas pipeline project to be completed at cost of US $ 7.6 billion will start supplying 3.2 billion cub feet per day of gas through 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 estimate was US$ 3.3 billion in 2004 which has now been updated to US.7.6 billion. The price increase was due to sharp increase in price of steel, increase in construction cost and increase in the cost of compressor stations. Minister for Petroleum and Natural Resources, Khawaja Muhammad Asif said, despite the significant increase in project cost estimates, the project is still considered as economically and financially viable.
The Turkmenistan Minister informed the Committee that huge new gas reserves had been found in Turkmenistan and the government is awarding the contract for certification of reserves of various gas fields to a British Consultant by end of this month. He said the total gas reserves were about 8 trillion cubic meters.
The parties have agreed to formulate a long term pricing mechanism which will be attractive to the buyers as well as the seller and will reflect the new market trends. The TWG and Steering Committee reviewed the revised Gas Pipeline Framework Agreement and endorsed the draft for signing by each government, thereby resulting in the joining of India in the project as a full member.
The four countries agreed to continue further discussion on the development and implementation of the project with renewed vigor on various matters. Turkmenistan side stated that Audit Report on certification of gas reserves will be available latest by September 30, 2008 Turkmenistan also agreed to supply the gas specification in one month.
The parties agreed that the TWG may prepare a draft of the GSPA and the next meeting of the TWG may be held in New Delhi at an early date. They also agreed to hold next meeting of the Steering Committee in new Delhi at an early date. ADB agreed to take up the issue of a comprehensive review of the feasibility study in order to move forward to the next phase of inviting investor’s interest in the project. The parties have agreed to form a consortium of investors to undertake the detailed feasibility study and further actions.
Prime Minister Syed Yousuf Raza Gilani Thursday said implementation of the multi-billion dollar Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project would usher in an era of prosperity and progress in the region. Talking to Ministers of Petroleum from Turkmenistan, India and Afghanistan who are in Pakistan to attend the 10th Steering Committee of TAPI, the Prime Minister termed it a vital project for the development and progress of the region.