With India, Pakistan and Afghanistan reaching a broad understandingon the issue of transit fee for import of natural gas through theproposed $7.6 billion Turkmenistan, Afghanistan, Pakistan and India(TAPI) pipeline project, the nations concerned are likely to meetnext month to sort out the issue and give it a final shape. Although all the parties agreed in principle to go ahead with thepipeline and no formal agreement had been signed, the progress hadbeen quite outstanding on the issue. However, a formal agreementhad not been signed, Minister of State for Petroleum and NaturalGas, R.P.N. Singh said. |
The next round of talks is scheduled to beheld in Ashgabat in Turkmenistan on May 6. All the three nations had met in Islamabad early this month to workout the issue of transit fee but no breakthrough could be achievedas India showed its reluctance to accept and pay the transit feebeing asked by Afghanistan. During the trilateral talks, India haddeclined to pay the 50 cents per million metric British thermalunit (mmBtu) as transit fee for the gas. However, the Indian side is learnt to have offered to stretch itsoffer to 47 cents per mmBtu and had sought time to get the approvalof the government before coming back to the negotiating table. Itwas decided that this issue would be taken up at the next round oftalks on May 6 where officials of the World Bank would also bepresent.
The U.S. is backing the TAPI pipeline and Pakistan and India haveagreed in principle that Pakistan would charge the same transit feethat India would pay to Afghanistan for transportation of gasthrough its territory. The pricing of gas has been agreed betweenTurkmenistan and India. The contract price of TAPI gas is linked to a formula whichcontains indices based on fuel basket and other indices which arenot as volatile as crude oil. The formula is similar to the onesused in international contracts.
The Gas Sale and PurchaseAgreement (GSPA) relating to the TAPI pipeline, which includes,inter alia, the pricing of Turkmen gas has not been signed as yet. The U.S. is backing the pipeline as an alternative to theIndia-Pakistan-Iran (IPI) pipeline that has been stalled for quitesome time now due to U.S. pressure on India and Pakistan not to goahead with the project.
The 1,735 km pipeline will run from theTurkmenistan gas fields to Afghanistan. It will start from theDauletabad gas fields and run into Afghanistan alongside thehighway running from Heart to Kandahar and then via Quetta andMultan in Pakistan. The final destination of the pipeline will be Fazilka near theIndia-Pakistan border.
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