India may join the project


Dec 22 - 28, 2003




One of the cross border gas pipeline projects, either from Turkmenistan or Iran may feature prominently in the regional economic cooperation programs of the year 2004 beginning with the SAARC Summit at Islamabad on January 4, 2004.

The two projects were conceived at least 10 years ago when the cost of the each project was estimated at around $2 billion to cater to the growing need of fuel and to shed the huge expenditures the economy has to bear on import of the POL products every year. The delay to materialize the project, if it may be called as delay, has resulted in cost escalation from $2 to the current estimate of $3.5 billion while the partner countries still have to decide the route for the proposed pipeline.

Although the projects are highly in the economic interest of the member countries but obviously some of the factors like political disturbance spanning over 10-12 years in Afghanistan, strained relations between India and Pakistan due to Kashmir issue, were the major causes for the delay in bringing the two project on the ground.

Now with the signs of improvement in bilateral relations between India and Pakistan as well as pressing needs for cheaper fuel seem to have paved the way for the project. India which had always declined to join the project has also shown its willingness reflected in the recent statement of its foreign minister in Iran that his country may participate in the project as the Iran has extended guarantee for all security risks of the project and uninterrupted supply through Pakistan.

The Iran-Pakistan Gas Pipeline Project which was conceived in 1993, and was later proposed to be extended in India. Despite the fact that Pakistan had conveyed its full support and assurance for security of supplies to India, India never lent a supporting hand to this project and had always expressed doubts over the security and uninterrupted supplies. However, in a recent development, Indian foreign minister during his visit to Iran has indicated that India may join this project on the assurances extended by Iran for guaranteed uninterrupted supplies of gas routed through Pakistan. A Committee co-chaired by the Secretary, MPNR along-with Deputy Minister of Iran National Oil Company (NIOC) has been constituted to review the progress on the project. The committee is assisted by the technical experts from both sides. There are three different routes under consideration for the Iran-India gas pipeline viz deep sea, shallow water and over-land. Feasibility study for the deep sea route is being conducted by M/s. Snam Progetti of Italy, while that of overland route is being conduct by M/s BHP of Australia. BHP has completed the phase-I of the study. The Feasibility study for the shallow water route is to be conducted by GAZPROM of Russia but they have not yet started the study.




The Government of Turkmenistan floated the idea of a gas pipeline from Turkmenistan to Pakistan in 1991.The two-day 7th meeting of the Steering Committee on Turkmenistan-Afghanistan-Pakistan (TAP) gas Pipelines Project was held in Islamabad from December 8-9, 2003.

Pakistan presented a detailed study on its supply demand requirements for the next 20 years starting 2004. The Committee decided that a pipeline size and capacity be projected demand growth in Pakistan.

The Steering Committee perused the presentation given by the Consultant Pens pen, UK. The Committee decided that the Consultant should review the feasibility keeping in mind the requirement in Pakistan as no formal response had been received from India till date. It was agreed that revised feasibility should include cost of project, security issues with special reference to Afghanistan during construction and subsequent operation of the pipelines. The Committee constituted a working group of Member States to further deliberate on various issues of the feasibility.

It was noted that Turkmenistan is negotiating with two companies to conduct an audit of Turkmenistan Gas reserves at Daultabad Gas Field including production facilities. It was decided that Turkmenistan will submit the reserve certification within six months starting January, 2004. In the meantime Turkmenistan Government expressed its willingness to provide a letter of comfort to the Committee with regard to availability of adequate gas reserves to support the project.

Asian Development Bank presented the status of various agreements. The Committee decided that these agreements that are host of Government Agreement, gas sale and transportation agreement will be finalized by first quarter, 2004. It was also decided that finalization of these agreements would be accomplished after completion of feasibility study and certification of Daultabad field reserves. The ADB informed that technical assistance for evaluating underground gas storage reservoir in Pakistan is expected to be approved by Bank shortly and the study would be completed by September, 2004. Regarding participation of other Central Asian States in investment consortium, the Committee decided that this issue was premature and would be considered as soon as the feasibility study and reserve certification has been obtained.

The Committee acknowledged the initiatives taken by the Member-States and appreciated ADB's facilitating role. The delegations of Turkmenistan, Afghanistan and ADB appreciated the courtesies/hospitalities extended by the Government of Pakistan at the meeting. The next meeting of the Steering Committee will be held in Islamabad probably towards the end of first quarter of 2004.