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'Afghanistan decides to quit TAPI project'

29 March, 2012

ISLAMABAD: Afghanistan has decided to opt out of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project and if Afghanistan does, then its share of 500 million cubic feet per day (mmcfd) gas will be distributed between Pakistan and India.

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ISLAMABAD: Afghanistan has decided to opt out of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project and if Afghanistan does, then its share of 500 million cubic feet per day (mmcfd) gas will be distributed between Pakistan and India.

This was stated by Petroleum Secretary Ejaz Chaudhary while talking to a group of energy reporters on Wednesday.

He said that final round of TAPI project between energy managers of Tetra partners is expected to be held on April 19 in Kabul, and if Afghanistan is not ready to be a part of TAPI project, then the share of Afghanistan would be distributed between Pakistan and India.

Under the agreement Pakistan and India's share is 1,325 mmcfd each and if Afghanistan.

The 1,680 kilometres (kms) long TAPI gas pipeline backed by the Asian Development Bank will bring 3.2 billion cubic feet of natural gas per day (bcfd) from Turkmenistan's gas fields to Multan and end at the northwestern Indian town of Fazilka.

An official of the Petroleum Ministry said that under the GSPA Pakistan was likely to pay 70 percent of crude oil price in international market.

The federal government has also decided to avail the offer of financial and technical support made by Russia for laying 781 kms long gas infrastructure of $1.5 billion Iran-Pakistan (IP) gas pipeline project. In this regard a high-level delegation would visit Moscow on April 2, 2012, said Chaudhary. A high-level delegation would leave for Moscow on April 2nd to negotiate with Russian company Gazprom for financial and technical assistance for the billion-dollar IP gas pipeline project.

He said that in result of successful negotiation between Islamabad and Moscow, Russian company would facilitate with three services including engineering design, construction and financing for laying 781 kms long IP gas pipeline project.

After Chinese bank Industrial and Commercial Bank of China (ICBC) quit financing the IP gas pipeline project due to Washington's pressure, Pakistan is now seeking to avail the Russian offer.

On March 14, Pakistan's Finance Ministry spokesman Naveed Iqbal said ICBC, a state-owned Chinese bank, which had agreed to finance the Pakistani section of IP gas pipeline, is no longer interested in the project.

Sources in the Ministry of Petroleum and Natural Resources revealed that the decision to negotiate a deal with Russia came in a recent meeting of the sub-committee formed by the Economic Coordination Committee (ECC).

Russian expressed its keen interest to finance the billion-dollar IP gas pipeline project, when Foreign Minister Hina Rabbani Khar was on a four-day visit to Moscow in February 2012, however Russian energy giant Gazprom linked this offer with awarding contract without bidding.

The petroleum secretary further said that if the deal between Islamabad and Moscow matures, the Pakistani government would need to relax procurement rules to facilitate the IP project.

“No decision, however, has been taken yet to award the contract to Russia, but Pakistan will negotiate this deal,” he added.

Chaudhry also dispelled the perception that ICBC has totally distanced itself from the project, saying, “We have written a letter to ICBC, asking it to clear its position as financial adviser to the project.”

The federal government is looking to increase its fuel imports from various sources, including Iran, to reduce power shortages that have crippled the country's industry and shaved percentage points off its gross domestic product growth.

The multi-billion-dollar gas pipeline aims to export a daily amount of 21.5 million cubic metres or 7.8 billion cubic metres per year of the Iranian natural gas to Pakistan.

The maximum daily gas transfer capacity of the 56-inch pipeline, which runs over 900 kms of Iran's soil from Asalouyeh in Bushehr province to the city of Iranshahr in Sistan and Balochistan province has been estimated at 110 million cubic metres.

Current energy crisis thoroughly jolted the entire country and the federal government has been looking for different resources to meet the energy needs including import of petroleum products from India.

He further added that federal government would save 35 percent transportation charges, if once a deal between Pakistan and India for import of petroleum product matures.

End.


 
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