Millennium Post

India may propose getting China co to lead Tapi pipeline

French giant Total SA had initially envisaged interest in leading a consortium of national oil companies of the four nations in the TAPI project, but backed off after Turkmenistan refused to accept its condition of a stake in the gas field that will feed the pipeline.

Since the four state-owned firms, including GAIL of India, neither have the financial muscle nor the experience of cross-country line, an international company that will build and also operate the line in hostile territories of Afghanistan and Pakistan, is needed.

Sources said Turkmenistan has clearly indicated that its law does not provide for giving foreign firms an equity stake in upstream gas field, without which western energy giants will not be interested to take the risk.

The issue of quickly getting a consortium in place will be discussed at the 19th Steering Committee meeting of TAPI pipeline project in Turkmenistan on Wednesday where India will be represented by Oil Minister Dharmendra Pradhan.

New Delhi, sources said, may present three options at the meeting. First, to get a US firm as the consortium leader after Turkmenistan allows US to enter its upstream sector.

Alternatively, the consortium of four partner countries or Turkmen Gas of Turkmenistan can become the leader, they said, adding that this option was acceptable to Afghan side and in case India agreed, the Pakistan side too may agree. But this option is fraught with funding and regional security issues. As a last option, a Chinese company can be brought in as a consortium leader. The Chinese are less likely to insist on an upstream stake in this project as they are already present in Turkmenistan, they said. Last week, state-run gas utility GAIL, along with national oil companies of Turkmenistan, Afghanistan and Pakistan set up TAPI Pipeline Company, a firm that will build, own and operate the gas pipeline across the four countries.

The Asian Development Bank is helping the four nations build a 56-inch diameter pipeline from Turkmenistan's giant Galkynysh gas field to serve energy markets in Afghanistan, Pakistan and India.

The TAPI pipeline 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.
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