Teething problems being sorted out



Oct 13 - 19, 2003



The much talked about cross border Turkmenistan gas pipeline project with economic fall out over at least 3-4 countries of the region may go into operation by 2008.

Especially Pakistan, which is the main stakeholder of this multinational project is sorting out currently teething problems.

Although India has not yet given its consent to participate in this 1700 km long pipeline project from Ashkabad, Turkmenistan to Multan in Pakistan, yet the energy starved India may have no option but to enter into this project to meet its 5-6 billion cubic feet gas requirement per day.

The next meeting of the steering committee is going to be held at Islamabad to discuss the issues agitating the minds of the partners and the international financing agencies. The main issue to be taken up in the next meeting of the steering committee is to ascertain a certificate from the government of Turkmenistan about availability of the gas in Daulatabad Gasfield.

According to informed sources, the issue was arisen following reports that the Turkmenistan government had entered into an agreement with some other buyers for the supply of gas from the same field. Since a huge investment worth $3.5 billion was involved in this project, all the stakeholders are naturally eager to know about the capacity and depth of the Gasfield, which could cater to the needs of the gas requirement in this region. Obviously, the investors would like to have correct and authentication through a certification of independent surveyors about the capacity of the Gasfield. It is also hoped that once the work on Turkmenistan gas pipeline projects was started it will pave the way for other gas pipeline project from Iran also. The economics of the two projects have already been worked out which are not only feasible but would greatly help booming the economy of the region.

The Asian Development Bank (ADB) would also formally reinitiate the expressions of interest for the project after the next steering committee meet.

The foreign diplomats of various countries have started communications and meetings with the Pakistan officials to pursue the Turkmenistan gas pipeline project.

About 40 different companies have also shown interest in the Turkmenistan gas pipeline project and some of them had even sought technical details of the project.

The parties to the project have already agreed to the Southern route for the project that starts from Daulatabad to Herat-Kandahar-Quetta and Multan.

The project also envisaged gas storage facilities in Pakistan and establishment of an independent security agency to take care of the 1700-km gas pipeline.

India currently required 5-6 billion cubic feet per day of natural gas and the market would be growing even further. This indicted that perhaps India would need gas intakes from both the pipelines including from Iran and Turkmenistan.

Pakistan, however, being the main partner of this multi-national project has asked Turkmenistan to provide certificates of the original and any subsequent reserve studies of the Daulatabad Gasfield carried out by an independent engineer of international repute.



Pakistan has rightly taken precautionary measures before entering to this $3.5 billion cross border project.

Unless complete information about the Gasfield and its reserves are made available, no bank, independence lending institution or project sponsor would be willing to joint the $3.5 billion Turkmenistan-Afghanistan-Pakistan gas pipeline project.

Pakistan is to the opinion that even the Government of Pakistan finds it difficult to back up any buyer's guarantee for the purchase of gas in the absence of the certification of reserves and allocation of the natural gas to this project and other associated guarantees on allocation to this project from the government of Turkmenistan.

Also no project would be willing to enter into the Gas Transportation Agreement with Turkmenistan in the absence of the reserves certification.

Pakistan has also complained that Turkmenistan minister of oil and gas industry Tachberdi Tageiv had promised a presentation on the gas potential of the Daulatabad field on the sidelines of sixth steering committee meeting held in Ashkabad, which also remained unfulfilled.

Pakistan was asking the Turkmenistan government to facilitate a visit of technical team from Pakistan for preliminary interaction with experts from that country to review relevant data pertaining to the Daulatabad Gasfield.

Pakistan has also sought information relating to gas produced since the start of supplies from the field and the remaining recoverable reserves, information on dedication of the field reserves for any other buyer under a long term agreement and maximum gas processing capacity installed and the date of initial installation along with current production rates of pipeline quality gas.

Pakistan also wants information relating to future plans for installing additional production capacity and time frame to meet the project gas flow requirement in phases starting May 2008 at about 0.6-1 billion cubic feet per day to 2-2.5 billion by 2015.