Shahid Khaqan Abbasi, Minister for Petroleum and Natural Resources of Pakistan, shed light on the massive TAPI gas pipeline project. TAPI gas pipeline aims to connect three energy-starved, countries, Afghanistan, Pakistan, and India, with Turkmenistan. Work on TAPI Gas pipeline started earlier this week. Turkmenistan will invest an estimate $25 billion to develop this pipeline which should eventually deliver 3.2 billion cubic feet per day (BCFD) gas to Afghanistan, Pakistan, and India for the next 25 years.
The Minister was addressing a conference in Islamabad and stated that it was the largest project of its kind in the world. The sale and purchase agreement of gas had already been signed in 2013 and an agreement was reached on the pricing mechanism as well. It was learned that the price will cost an estimated 20% less than that of Brent crude. This translates into a sale price of $3.2 per million British Thermal Unit (MmBTU). After transit and tolling is paid to Afghanistan, the price will eventually be around $6.5 MmBTU, which is marginally less than the proposed Iranian gas rate primarily because of much larger quantities.
The project had been in the pipelines for the past 25 years however, certain political and security issues paved way for continued postponement. It was learned that Turkmenistan will also invest $10 billion required for the 1,680 km, 56” diameter pipeline for which purpose the government has already formed a consortium with a few Japanese firms. State-owned Turkmengaz will lead said consortium. According to the agreement, Pakistan and India would each get 1.325 BCFD of gas while Afghanistan stands to receive 500 MmCFD. Turkmenistan should be able to reach financial close for the TAPI gas pipeline project by December 2016 eventually completely the gas pipeline by December of 2019.You can follow us on Facebook, Twitter, or Google+ for more updates. Otherwise fill in the subscription box above, or subscribe to our RSS Feed.