Energy Sector - 2

[Naresh]

[center]<b><span style='font-size:21pt;line-height:100%'>Meeting on Turkmenistan pipeline put off</span></b> <!--emo&:flush--><img src='style_emoticons/<#EMO_DIR#>/Flush.gif' border='0' style='vertical-align:middle' alt='Flush.gif' /><!--endemo-->[/center]

<b>ISLAMABAD, Aug 21 : A steering committee meeting of the Turkmenistan-Afghanistan-Pakistan-India (Tapi) gas pipeline project, scheduled for Wednesday and Thursday in Islamabad, has been postponed indefinitely on Ashkhabad’s request, it is learnt.

Pakistan and the Asian Development Bank (ADB) had organised the meeting and Afghanistan, India and Turkmenistan had agreed to participate. However, the Turkmen government later sought postponement, citing domestic political situation, informed sources told Dawn.</b>

The meeting was considered crucial for the fact that it was to formally consider amendments made by the ADB in the multilateral framework agreement for inclusion of India in the project and discuss the security situation in Afghanistan which was one of the most important factors in realisation of the $4-billion transnational pipeline project.[

<b>On the agenda of the meeting was finalisation of gas volumes by the respective parties. Ashkhabad was to specify how much gas quantities, based on independent certification, it would dedicate for the project and the recipient nations were to put forth their gas requirements through the pipeline that is to stretch more than 1,600kms from Turkmenistan’s south-eastern Daulatabad field to Indian city of Bikaner, via Afghanistan and Pakistan.These estimates (dedication by Ashkhabad and requirement in India and Pakistan) are required to be reflected in the draft gas sales and purchase agreements (GSPA) prepared by Pakistan.</b>

The finalisation of framework agreement by the four participating countries is the key stage where they can think of implementing the project and trigger a host of activities and agreements between and among the four nations and the ADB. The framework is to deal with contractual obligations of the parties in construction of the pipeline, security, gas tariff and uninterrupted gas flows over 30-year life of the project.

The ADB had furnished final draft of the inter-governmental framework agreement to the four nations in April this year along with some modifications that were required to allow inclusion of India in the pipeline project. The original inter-governmental agreement was prepared without making India a part of the project and hence an amended draft was required following an “in principle” decision of the Indian cabinet to join the project.

A source in the petroleum ministry, however, said before finalisation of the four-nation agreement, the stakeholders have to hammer out seven issues that have been hampering progress on gas pipeline from Central Asia to Pakistan for almost two years now. The capital cost of the 1,435km pipeline of 56-inch diameter (from Turkmenistan to Multan) had recently been updated to about $4 billion from $3.3 billion in 2004.

<b>Pakistan believes that bottlenecks hampering progress on the project involved non-confirmation of uncommitted gas volume by Turkmenistan regarding Daulatabad gas field, uncertainties or lack of clarity with regard to price of the gas to be demanded by Turkmenistan and security situation in Afghanistan.

Also there are significant difficulties in the expected implementation of security and risk mitigation measures proposed by the ADB’s consultant and usual delays of the Turkmen government in complying with the decisions taken by the steering committee.</b>

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