Turkmenistan close to gas deal on trans-Afghan pipeline

Turkmenistan plans to sign the sales and purchase agreement for the TAPI pipeline on Wednesday. (Photo: Reuters)

May 21, 2012, Monday/ 12:47:00

Turkmenistan plans this week to sign a long-awaited agreement to supply natural gas to Pakistan and India through an ambitious US-backed pipeline that would cross Afghanistan, a source in the Central Asian country's government told Reuters on Monday.

Turkmenistan, which holds more than 4 percent of the world's natural gas reserves, plans to sign the sales and purchase agreement for the TAPI pipeline on Wednesday, during an international gas conference in the Caspian Sea resort of Avaza. "The plan is to sign the TAPI natural gas sales and purchase agreement with Islamabad and Delhi on May 23 in Avaza, by the Caspian, where the gas congress is opening," the government source said, on condition of anonymity. He gave no details of the content of the agreement. 

The idea of the TAPI pipeline, an acronym formed from the initials of the four countries through which it would pass, was first raised in the mid-1990s but construction has yet to begin. In a sign a deal might be imminent, India's cabinet last week allowed state-run gas-firm GAIL (India) Ltd to sign a gas purchase agreement with Turkmenistan.

Turkmen officials have said the proposed 1,735-km (1,085-mile) pipeline could carry 1 trillion cubic metres of gas over a 30-year period, or 33 billion cubic meters a year. But the route, particularly the 735-km (450-mile) leg through the Afghan provinces of Herat and Kandahar, presents significant security challenges and will require billions of dollars in funding.  A U.S. official estimated in March that the pipeline could cost between $10 billion and $12 billion to construct. Daniel Stein, senior adviser to the U.S. State Department's special envoy for Eurasian energy, also said that two major U.S. oil companies were interesting in participating in the project. He declined to name the companies. 

Ex-Soviet Turkmenistan is promoting the TAPI pipeline as a key element in plans to cut reliance on supplies to Russia and to boost annual gas exports to 180 billion cubic meters by 2030. BP data show Turkmenistan's natural gas reserves equal to those of Saudi Arabia and behind only Russia, Iran and Qatar. The country aims to supply gas from its Galkynysh field, better known by its previous name, South Iolotan. Auditor Gaffney, Cline & Associates has ranked the field the world's second largest, with gas reserves of between 13.1 trillion and 21.2 trillion cubic meters.

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