THE EXPRESS TRIBUNE, ISLAMABAD, 10th SEPTEMBER 2013:
Turkmenistan has offered US and European companies grant of offshore exploration rights and the gas produced can be swapped for gas found onshore for export to Afghanistan, Pakistan and India under a pipeline project.
The offer comes in the wake of demands by international oil and gas companies for rights over exploration upstream against financing the Turkmenistan, Afghanistan, Pakistan and India (TAPI) pipeline, say sources. However, Turkmenistan does not permit foreign companies oil and gas exploration on onshore fields and is now asking them including US Chevron to search for energy sources in offshore wells.
“The Turkmen government now wants US and EU oil and gas companies to drill offshore wells to extract gas that may be swapped for gas produced from onshore wells for export to Afghanistan, Pakistan and India under the TAPI pipeline project,” a source familiar with the development said.
All countries, which are part of the TAPI pipeline, have agreed to hire Asian Development Bank (ADB) as transaction adviser as well as its structure.
According to sources, these countries will establish TAPI Company for a smooth and speedy execution of the project and each will deposit $5 million as token money.
The ADB will arrange funds from different countries and international companies to finance the $10 billion gas supply project. Earlier, the cost was estimated at $7.5 billion, which is now projected to rise past $10 billion because of delay in work.
In a new development, Afghanistan, which had earlier backed out of the project saying it was only interested in transit fee, has signed a gas sale and purchase agreement to become part of the pipeline.
The government of Pakistan is going to open an assignment account to deposit $5 million in TAPI Company. It has already given the go-ahead in this regard.
The US has been pushing Pakistan to press on with the TAPI pipeline and shelve the planned Iran-Pakistan (IP) gas pipeline because of a standoff with Tehran.
However, the new government of Pakistan Muslim League-Nawaz (PML-N) has staved off the pressure and assured Iran that work on the IP project will go on according to schedule.
Under the TAPI project, Pakistan will get 1.365 billion cubic feet of gas per day (bcfd) from Turkmenistan, India will also receive the same 1.365 bcfd and Afghanistan will get 0.5 bcfd.
Turkmenistan will export gas through an 1,800km pipeline that will reach India after passing through Afghanistan and Pakistan.
Pakistan and India have already signed gas sale and purchase agreements and efforts are under way to attract potential investors for financing the project.