(EnergyAsia, January 15 2015, Thursday) — Chinese and Malaysian state-owned firms along with France’s Total are believed to have expressed interest in participating in the development of a proposed US$10 billion pipeline to deliver natural gas from Turkmenistan to Afghanistan, Pakistan and India.


International firms will play an important role in planning, designing, building and operating the 1,800-km pipeline, according to the project’s adviser, the Asian Development Bank (ADB). After years of delay, the bank announced last November that the state gas companies of Turkmenistan, Afghanistan, Pakistan and India had jointly set up a company to build, own and operate the pipeline.

The Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline will be equally owned by state-owned Turkmengas, Afghan Gas Enterprise, Pakistan’s Inter State Gas Systems (Private) Limited, and GAIL (India) Limited.

The issue of identifying and selecting a consortium to build and operate the pipeline was discussed at the project’s 19th steering committee in Turkmenistan last November.

India is interested to invite a Chinese state firm to lead the consortium to build the pipeline given the enormous political and financial risks involved, and China’s experience in building and operating gas infrastructure.

Malaysia’s state energy firm Petronas is reported to be in contention for a role in the project through a joint venture with French major Total SA to produce gas from onshore fields in Turkmenistan. According to the ADB, the consortium leader must be a technically capable and financially sound company as it will be tasked to help design, finance, construct, own and operate the gas pipeline.

Total is eyeing a lead role, but it will need to scrap or water down its pre-condition for a stake in Turkmenistan’s gas reserves. Chevron and ExxonMobil have dropped out after learning that they will not be allowed to own a stake in TAPI.

Through the pipeline, Turkmenistan will export up to 33 billion cubic metres of natural gas a year from its giant Galkynysh field to the other three countries for 30 years. With a proposed long-term capacity to deliver 90 million cubic metres a day (cm/d) of gas, the pipeline is expected to begin operating in 2018, although this could be delayed by negotiations among the various stakeholders. The current slump in oil and gas prices along with the ongoing political turmoil in Afghanistan and Pakistan has also cast a pall over how quickly companies would respond to the call for investment in the region.

India and Pakistan have indicated they each are ready to commit to buying 38 million cm/d of TAPI’s capacity with Afghanistan the remaining 14 million cm/day. From the Galkynysh field which is said to hold some 16 trillion cubic feet of natural gas, the pipeline will run through the Afghan provinces of Herat and Kandahar, Pakistan’s Multan and Quetta before ending at Fazilka, in India’s Punjab state.

The issue of identifying and selecting a consortium to build and operate the pipeline was discussed at the project’s 19th steering committee in Turkmenistan last November.

India is interested to invite a Chinese state firm to lead the consortium to build the pipeline given the enormous political and financial risks involved, and China’s experience in building and operating gas infrastructure.

French major Total SA has also expressed interest to play a lead role, but it will need to drop its pre-condition for an equity stake in Turkmenistan’s gas reserves. Chevron and ExxonMobil have also dropped out after learning that they will not be allowed to own a stake in TAPI.

Malaysia’s state energy firm Petronas is also reported to be in contention for a role in the project through a joint venture with Total to produce gas from onshore fields in Turkmenistan. According to the ADB, the consortium leader must be a technically capable and financially sound company as it will be tasked to help design, finance, construct, own and operate the pipeline.

The ADB did not say when the pipeline’s construction will begin and complete, and how much the project will cost.

In 2008, Turkmenistan, Afghanistan, Pakistan, and India signed a framework agreement to start work on TAPI, but there was no progress the following two years until the governments and the UN were able to resolve basic security issues. As the pipeline will pass through deserted mountainous areas, the four governments and the UN will have to provide guarantee of security. Taliban and Al Qaeda militia as well as local tribesmen have warned that they will attack the pipeline.