GAIL will take TAPI stake as West’s cos shun Asian project

The four nations planning the TAPI pipeline last week decided to co-own the project and a joint venture company with participation from each country would be set up to build and operate the over 1,800 line. "Turkmenistan's state-owned TurkmenGaz has said it will be the leader of the consortium and will take a minimum 51 <g data-gr-id="31">per cent</g> stake," Oil Minister Dharmendra Pradhan told reporters.

The work on TAPI pipeline is yet to commence as the four nations have not succeeded in finding a reputed international firm that could lead the consortium to construct and operate the 1,800-km long pipeline. Pradhan said at the 22nd Steering Committee meeting of TAPI project in Ashgabat last week <g data-gr-id="37">it was agreed by the four nations</g> to make <g data-gr-id="38">investment</g> in the project subject to techno-commercial viability, shareholders agreement and investment agreement. Officials from the state companies of the four nations will meet in Dubai on August 18-19 to discuss equity participation as well as technical feasibility, he said.

French giant Total SA had initially envisaged interest in leading a consortium of national oil companies of the four nations in the TAPI project. However, it backed off after Turkmenistan refused to accept its condition of a stake in the gas field that will feed the pipeline. "Their (Turkmenistan) law does not allow giving <g data-gr-id="41">stake</g> in upstream fields. So we now have this arrangement," he said adding GAIL will take equity from <g data-gr-id="40">Indian</g> side in the project consortium. "How much equity will be decided during talks," he said. Since the four state-owned firms, including GAIL of India, neither have the financial muscle nor the experience of a cross-country line, an international company is needed to build and operate it in hostile territories of Afghanistan and Pakistan. 

The TAPI pipeline will have <g data-gr-id="35">a capacity</g> to carry 90 million standard cubic metres a day (<g data-gr-id="28">mmscmd</g>) gas for a 30-year period and will be operational in 2018. India and Pakistan would get 38 <g data-gr-id="29">mmscmd</g> <g data-gr-id="34">each,</g> while the remaining 14 <g data-gr-id="30">mmscmd</g> will be supplied to Afghanistan.

TAPI will carry gas from Turkmenistan's Galkynysh field, better known by its previous name South <g data-gr-id="32">Yoiotan</g> Osman that holds gas reserves of 16 trillion cubic feet. From the field, the pipeline will run to Herat and Kandahar province of Afghanistan, before entering Pakistan.