Turkmenistan gas pipeline moves closer to reality

The Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline project has moved closer to realisation with petroleum ministry set to approach the cabinet for approval of Gas Sales and Purchase Agreement (GSPA) between GAIL and Tukmen Gaz for delivering hydrocarbon at Fazilka in Punjab.

The much-needed Turkmen gas will be available for 30 years and address long term energy needs of India as domestic gas availability beyond 2020 has not been established.

Government sources said the National Security Council Secretariat, however, has added a rider to ministry's proposal saying that possibility of China participating in the consortium for finance, design and implementation of the project would not be in Indian's interest.

The NSCS is of the view that security of the pipeline was of critical consideration in order to assess long term viability of the project. The pipeline, which would pass through politically unstable states, will evacuate some 411.173 billion cubic metres of gas from South Yolotan-Osman gas field within five years of signing of the 30-year GSPA.

During the 9th bilateral meeting held between Indian and Turkmenistan ministers in the Capital on Oct 12, 2011, the projected gas base price was agreed by New Delhi after removal of the price review clause. The price of Turkmen gas is expected to be between the LNG and domestic gas price but this gap could reduce further if domestic gas price rises after KG-D6 block come up for revision after 2014.

Although there are geopolitical risks in the project, if India is able to cover its risks and get environmental friendly methane gas delivered at Pakistan-India border, then the long term gas availability in north India at a reasonable price will be beneficial to economy in the long run.