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Agreement on the TAPI gas pipeline construction project is signed in Ashgabat

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Agreement on the TAPI gas pipeline construction project is signed in Ashgabat

In the framework of the International Oil and Gas Forum that takes place in the Turkmen capital, the Transaction Advisory Services Agreement (TASA) on the Turkmenistan-Afghanistan-Pakistan-India gas pipeline was signed by the Turkmengaz state concern, Afghanistan's state gas corporation, Pakistan's Interstate Gas Systems Ltd, Gali company (India), and the Asian Development Bank.

Noteworthy, by the initiative of President of Turkmenistan Gurbanguly Berdymuhamedov, in Ashgabat a regular Summit of the project member-countries was held on December 11, 2010. The Summit resulted in signing of the Framework Agreement on gas pipeline and the Intergovernmental Agreement on the TAPI project implementation were signed.

At present, all necessary legal and commercial documents have been prepared. The natural gas sale-and-purchase contracts have been signed between economic entities of the project member-countries. In particular, in May 2012, in the framework of the III International Gas Congress, the natural gas sale-and-purchase Agreements were signed with national companies of India and Pakistan. In the frames of the 17th meeting of the Steering Committee, on July 9, 2013, the natural gas sale-and-purchase contract was signed between the “Turkmengas” State Concern and the Afghanistan Gas Corporation. Already in August, in the frames of the 23rd meeting of the Technical Working Group in the city of Dubai of the United Arab Emirates, the issues of TAPI project advancement have been completely coordinated and solved, and the draft of the signed-today Agreement has been prepared.

By now, all sides are close to the establishment of a TAPI Ltd consortium for the project's practical implementation. To this effect, legal and technical aspects of the project are studied as well as the issue of attracting to the project leading foreign firms that have technical potential and advanced technologies and also experience of constructing major gas pipelines.

From now on, the Asian Development Bank acts in the capacity of the Transaction Advisor of the TAPI project. Its key task is in establishing of the TAPI Ltd. project company whose major shareholders at the initial phase of the project, will be the within-said authorized representatives of the Parties as well as identifying of the consortium leader for realization of one of the Asian continent’s largest energy projects.

Total length of the gas pipeline will be 1,735 km, including 200 km – in the territory of Turkmenistan, 735 km – in the territory of Afghanistan, 800 km – in the territory of Pakistan, to reach, finally, the settlement Fazilka at the border with India. The projected annual capacity of the gas pipeline is 30 BCM.

As is known, at the present time, the most important aspect of the Turkmen state’s energy strategy is creation of the multi-vector system of transporting hydrocarbons and development of a reliable mechanism for ensuring security of energy carriers transit at the world markets. Visual confirmation of it are the already realized and under-realization in Turkmenistan large infrastructure projects in the fuel and energy sector, and also the international initiatives of our country in the sphere of providing energy security.

As President Gurbanguly Berdymuhamedov repeated many times, construction of the Turkmenistan-Afghanistan-Pakistan-India gas pipeline is not only the mutually-beneficial energy and economic project, but it is also a consolidating factor of enormous political significance, which confirms that the combination and compatibility of the states’ interests at the international energy area, and consequently, in large geo-politics are real and realizable. The project is the clearest evidence of the fact that in the presence of political will and constructivism, the main goal – provision of the balance of interests of producers, transit countries and energy consumers – is achievable.

Apparently, the TAPI project has already not only acquired the real contour – it has demonstrated that the radius of its potential impact is much wider of the future project’s geographical route. Already now, the project can be said about as a real and workable stabilizing factor capable in the future to have a positive influence on the general situation in Central and Southern Asia and adjoining regions, to give additional sustainability to the entire system of political and economic ties at the Continent.