(EnergyAsia, April 19 2016, Tuesday) — Officials of Turkmenistan, Afghanistan, Pakistan and India, and the Asian Development Bank (ADB) have signed an investment agreement for the construction of a proposed US$10-billlion pipeline to deliver natural gas from Central to South Asia.
The agreement will pave the way for the TAPI Pipeline Company Limited (TPCL), owned by the four countries, to update the feasibility study and the pipeline route linking natural gas fields in Turkmenistan to Afghanistan.
The agreement provides an initial budget of over $200 million to fund the next phase of the development of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline, said the ADB. This includes funding for detailed engineering and route surveys, environmental and social safeguard studies, and procurement and financing activities, to enable a final investment decision, after which construction can begin. Construction is estimated to take up to three years.
TPCL will build, own and operate the pipeline, which is envisaged to transport up to 33 billion cubic meters of natural gas annually from Turkmenistan to Afghanistan, Pakistan and India over 30 years. The pipeline stretches about 1,600 kilometers from the Afghan/Turkmen border to the Pakistan-Indian border.
“The financial support committed by the shareholders of TAPI under this investment agreement is a true testament of their intention to get this historic project off the ground and running,” said Yagshygeldi Kakayev, deputy chairman of the Cabinet of Ministers of Turkmenistan. The agreement was signed in Ashgabat, Turkmenistan.
“TAPI exemplifies ADB’s key role in promoting regional cooperation and integration over the past 20 years,” said Sean O’Sullivan, ADB’s Director General for the Central and West Asia Department. “TAPI will unlock economic opportunities, transform infrastructure, diversify the energy market for Turkmenistan, and enhance energy security for the region.”
Acting as TAPI secretariat since 2003 and as transaction advisor since 2013, ADB has played a key role in pushing for TAPI’s development. The bank helped establish TPCL, select Turkmengaz as consortium leader and finalise the shareholders’ and investment agreements.