Global energy majors line up at TAPI project roadshow

TAPI invited firms which can become consortium leaders for executing the 1,680-km cross-country project.

Written by Agencies | London | Published: September 18, 2012 7:13 pm

Global energy majors ExxonMobil Corp,Royal Dutch Shell,Chevron Corp and Petronas of Malaysia queued up at a roadshow organised here to rope in a strategic investor for executing the ambitious TAPI gas pipeline.

The Turkmenistan-Afghanistan-Pakistan-India (TAPI) project countries invited firms which can become consortium leaders for executing the 1,680-km cross-country project,an official participating in the event said.

Besides,lead financiers too were invited at the roadshow which began yesterday,to determine the market and conditions under which qualified firms would participate in the project.

“We had representatives of ExxonMobil,Shell,Chevron,Petronas and Temasek (the Singapore-based Asia investment firm) at the roadshow,” he said. “Preliminary discussions were held but nothing has been finalised so far.”

Such roadshows – where representatives of the four nations along with the Asian Development Bank (ADB),the lead development partner for the project,held discussions with potential contractors – were previously held at Singapore on September 10 and New York on September 13.

“The idea behind the road shows is to interact with prospective consortium leaders and financiers of the project to understand their requirement,” he said.

After the road shows are over,the delegation will move to Ashgabat (Turkmenistan) on September 22-23 for the Technical Working Group (TWG) and Steering Committee (SC) meetings of the project.

The TAPI pipeline — which would originate from Turkmenistan,and pass through Afghanistan and Pakistan before entering India — will have a capacity to carry 90 million standard cubic metres a day (mmscmd) gas for a 30-year period

and will be operational in 2018.

India and Pakistan would get 38 mmscmd each,while the remaining 14 mmscmd will be supplied to Afghanistan.

The official said the road shows are aimed at “selling” the ambitious project to oil companies and financiers and invite investment for it.

The entire process of selection,selection of the consortium leader and finding the investors is expected to take one year. The construction of the pipeline is expected to

start in 2015.

After the road shows,bids will be invited to select the consortium leader who will be responsible for the design,funding,building,control and subsequent operations of the pipeline.

The US is backing the TAPI pipeline as an alternative to the Iran-Pakistan-India line in its efforts to choke Tehran financially over its suspected nuclear weapon programme.

While New Delhi had reached agreements on price and transit clauses for the IPI pipeline,TAPI is the first transnational line for which it has signed a Gas Sales and Purchase Agreement (GSPA) in May this year.

Besides meeting its energy needs,TAPI would be test of peace between India and Pakistan. More importantly,it will test Islamabad’s resolve to normalise trade with its neighbour by allowing safe passage of the gas through the 800 km section of the pipeline passing through its territory.

Also,the 735-km leg through the Afghan provinces of Herat and Kandahar would presents significant security challenges.

TAPI will carry gas from Turkmenistan’s Galkynysh field,better known by its previous name South Yoiotan Osman that holds gas reserves of 16 trillion cubic feet.

From the field,the pipeline will run to Herat and Kandahar province of Afghanistan,before entering Pakistan. In Pakistan,it will reach Multan via Quetta before ending at

Fazilka (Punjab) in India.

Sources said India will pay for the gas only when it is delivered to it at its border. Afghanistan and Pakistan would get USD 0.50 per million British thermal unit as transit fee from India.

Ex-Soviet Turkmenistan is promoting 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 metres by 2030.

BP data show Turkmenistan’s natural gas reserves equal to those of Saudi Arabia and behind only Russia,Iran and Qatar.

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