As India-Iran gas pipe sputters, Turkmenistan plan surges ahead

And unlike the one-step-forward-two-steps-back deliberations going on between Iran and India over the Gas Sales Purchase Agreement (GSPA) or the project execution, or between India and Pakistan over pipeline tariff and transit fee, the drafts submitted by ADB clearly spell out the role and responsibility of each signatory.

Unlike Iran, which is yet to earmark a dedicated field for feeding the Iran-Pakistan-India pipeline, ADB’s HoA specifies that Turkmenistan will provide 34.26 trillion cubic feet of gas from its Daulatabad fields to meet Pakistan’s need of 16.95 TCF, and India and Afghanistan’s joint demand of 17.31 TCF over 30 years.

And by December 31, Turkmenistan will provide the three buyers certification from an international firm “confirming availability of adequate undedicated gas reserves in the field,” says the HoA.

TAPI suits New Delhi better as it provides more gas upfront. While Iran is offering a flat 30 million standard cubic metres per day throughout the tenure, TAPI provides India 40 MSCMD during the first four years and 31 MSCMD in next 26 years when the country’s domestic gas would flow from the Krishna-Godavari finds.

Moreover, the gas quality— except for hydrogen content and calorific value to be sorted out before the November signing — has been detailed, including the pressure at delivery. Compare that with Iran-India GSPA on which GAIL (India) has pointed out that the gas composition differed from that mentioned in the Iran-Pakistan GSPA.

The ADB is unambiguous that the GSPA would be for 30 years, followed by another 20 years for all buyers. As for the GSPA that Iran sent to Pakistan, the term was 30 years, while the one it sent to India fixed the supply period at 25 years. The GPFA on TAPI project lays down the formation of a consortium of all four players with willingness to provide support for attraction, promotion and protection of foreign and domestic investment in the project.

As for pipeline tariff, the computation will be through the internationally accepted cost-of-service methodology while transit fee would be based on the volume of gas exiting to the next receiving country. These issues remain unresolved between India and Pakistan with both singing their own song in absence of a laid-out methodology.

How Iran pipeline leans towards Pak

• Supply period for India fixed at 25 yrs while for Pakistan it’s 30 yrs

• Iran introduced a price revision in Clause 6.3 which India says should be included “only in case of extreme economic hardship”

• Only the Indian agreement has minimum payment clause in case of failure to take gas supply

• Shortfalls in supplies, if any, to be compensated by Iran in three years for India whereas for Pakistan, it’s five years

• While Pak gets 30 days to pay monthly invoices for Iranian gas, India gets a week