Gas agreement paves the way for 1800 km pipeline

By Chris Sleight23 May 2012

The signature of a gas sales and purchase agreement between Pakistan and Turkmenistan will pave the way for construction of the 1800 km, US$ 7.6 billion Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline, according to the Asian Development Bank (ADB).

The ADB has been involved in negotiations on the TAPI project for more than ten years. The pipeline is designed to help meet rising energy demand in India and Pakistan as well as alleviate power shortages in Afghanistan through the bulk export of natural gas from Turkmenistan. It is expected to have a capacity of 90 million m3 per day.

"The pipeline represents a win-win scenario for each TAPI country, as it will give Turkmenistan with the world's fourth largest reserves more diverse markets and helps fuel the energy-hungry economies to the South. Each country stands to gain, making this not only the 'Peace Pipeline,' but a pipeline to prosperity as well," said Klaus Gerhaeusser, ADB director general of the central and West Asia Department, which has acted as the TAPI Secretariat since 2002

With the TAPI pipeline in place, Turkmenistan's gas will reach a greater range of overland destinations, diversifying from its existing markets in China, Iran and Russia.

A Gas Sales and Purchase Agreement between Afghanistan and Turkmenistan is expected to be finalised shortly. The next step is for the four TAPI nations to attract commercial partners to build, finance, and operate the pipeline, a project the ADB estimated in 2008 would cost at least US$ 7.6 billion.

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