India on Thursday gave its last and final assent to join the
proposed four nation Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project with the rider that the leader of the builder-operator consortium be selected through a global bidding based on transport tariff.
This was a last-minute inclusion incorporated earlier this month after the Department of Economic Affairs insisted that consortium leader be selected through transportation tariff-based bidding to rule out tariff fixation at an exorbitant level by the selected party.
The draft Cabinet note prepared by the petroleum ministry did not detail the leader selection process but had left it to transaction advisor Asian Development Bank (ADB) to prepare the future possibilities after consulting potential consortium leaders and financiers.
The only safeguard was that since all the four parties are likely to be members of the consortium company,it is expected that the transportation tariff would be arrived at in a fair and transparent manner and would be computed on the cost-of-service basis.
Six years ago,New Delhi gave an in-principle approval to join the project that would provide 411.173 billion cubic metres of Turkmen gas over 30 years. Since then,all major issues have been resolved except for indexation formula linked to the transit fee.
A final round of negotiations will be held to finalise the indexation formula as a trilateral consensus has been arrived for a uniform transit fee rate of 49.5 cents per million British thermal units.
The Turkmen gas would cost little less than $11 per mBtu at prevailing crude oil price of $100 per barrel. The pipeline would originate from Turkmenistans Galkynysh gas field to reach Fazilka in Punjab,via the Afghan cities of Herat and Kandahar and Quetta and Multan in Pakistan.