TURKMENISTAN GAS PIPELINE PROJECT

Another major development in this cross border pipeline is the entry of Russia

By AMANULLAH BASHAR
July 14 - 20 , 2003 

The participation of India in the multinational cross border gas pipeline project originating from Turkmenistan, is likely to be one of the significant outcome of the forthcoming high level talks between India and Pakistan.

The energy starved India was always willing to join the cross border pipeline to overcome its energy constraints, however, it has some reservations to join in the projects obviously due to strained relation with Pakistan as well as political instability in Afghanistan from where the pipeline has to pass through. However, the situation appears to be quite different following changing political aura about this part of the world. It is learnt that Indians have expressed their willingness to be a part of the $2.5 billion project following assurances held out by Pakistan as well as other international financing agencies for uninterrupted gas supply in future.

Another major development in this cross border pipeline is the entry of Russia which has reportedly developed understanding for buying natural gas from Ashkabad gas fields, containing 45 trillion c.f. of natural gas. Pakistan has raised the question that how much of the reserves would be available for the pipeline because it is extremely important for the stakeholders. In this regard, Turkmenistan government may submit a certificate regarding availability of the gas reserves.

The experts are, however, of the opinion that the gas pipeline would go ahead without any impediment because of plenty of gas is available in that gasfield which would be enough for next 25 years requirement of the region.

The gas pipeline project will transmit about 3 billion cubic feet of natural gas from Turkmenistan via Afghanistan and Pakistan and terming at Indian soil. Experts are of the opinion that the project may generate lot of economic activity in the region especially in Pakistan and India with the availability of comparatively much cheaper fuel for the manufacturing sector.

In the recently concluded talks between the representatives of Pakistan, Afghanistan and Turkmenistan held at Ashkabad, the route of the pipeline was approved.

This cross border pipeline is proposed to be laid from Daulatabad gas fields through Herat and Kandahar in Afghanistan and would enter Pakistan via Quetta and will terminate at Multan. However, if neighboring India also comes into the fold, the pipeline would be extended through Punjab to Indian destination.

It may be recall that earlier Pakistan was favoring the northern route, which ended at Lahore, passing through Peshawar, and Kabul in Afghanistan. However, Pakistan's delegate at the meeting supported the new route after discussing the cost differential between the two routes.

The participants of the meeting also discussed the marketing side of the gas and entrusted the Asian Development Bank (ADB) to prepare the feasibility draft of the agreements. The draft will be presented at the next meeting to be held at Ashkabad.

During the two-day meeting, the representatives submitted proposals of their respective countries for the construction of the pipeline. It may be mentioned that the Asian Development Bank is acting as the guarantor of the project. The ADB provided $1.5 million assistance to prepare the feasibility of the project.

During the course of meeting, ADB representatives submitted the first feasibility study of the project besides discussing the commercial and cost aspects of the project. The bank also discussed the proposals of different potential sponsors and international financial institutions.

The ADB plans to invite bids from international companies for the construction of the pipeline by November this year. It is said that more than 40 different companies had expressed interest for the construction of the project.

The ADB has also recommended hiring a consortium for construction of the pipeline rather than a single company because it will ensure commitment of the builder.

Pakistan has also suggested to the Asian Development Bank that prior to pre-qualify companies for the building of the project, it should obtain certification about the reserve position of the natural gas at Daulatabad gas fields.

Pakistan moved the demand for reserve certification in the meeting of the steering committee for the gas pipeline project.

Although ADB was willing to pre-qualify the four companies but the bank has been asked to first get the certification of the gas reserves before the next meeting of the steering committee.

Earlier, Turkmenistan had declared that Daulatabad gas field has 45 trillion cubic feet proved reserves but now it has reportedly dedicated some of the reserves of the field to Russia.

The next meeting probably to be held in Pakistan appears to be of significance as with the certification about reserve position and its availability for sale and purchase would determine the future course of action about the project.

Pakistan has rightly asked for certification of the available gas for sale before entering into such a huge project involving interests of the stakeholders.