ISLAMABAD, Nov 17: Pakistan, Afghanistan and Turkmenistan would sign an agreement here on Dec 17 to launch the $3.2 billion trans-Afghanistan gas pipeline project, a government official told Dawn.
To be called ‘Legal and Regulatory Framework Agreement’, the accord will trigger a chain of agreements on commercial, financial and technical aspects between the three nations and various international donors and companies.
“At the moment we are finalizing various clauses of the LRFA and if that process is completed, the agreement will be signed during the (tri-nation working) committee meeting next month,” Petroleum Secretary M. Abdullah Yousaf said.
He told Dawn that the working committee meeting would be held on Dec 16-17 in Islamabad. “This is one of the several agreements...may call it outline agreement or kind of intentional agreement...that has to be signed to let the feasibility study move onward.”
Mr Yousaf said Turkmenistan was insisting that the LRFA should be signed by the heads of state but, he added, there was no need for that and the agreement could be signed at the operational level.
He said the three sides had given green signal to the Asian Development Bank for a feasibility study and ADB had subsequently taken the job in hand to ascertain economics and viability of the 1500km pipeline from the Turkmen Daulatabad gasfield to the Gwadar port and perhaps, onwards to India at a later stage.
The agreement would also cover broad parameters of the financing options, security aspects and the involvement of allied industries and related economic cooperation, sources said. They said the three sides had agreed on all issues at the tri-nation working committee meeting in Ashkhabad last month but the Pakistani delegation was not clear on various clauses of the LRFA. The Pakistani delegation had told the meeting that it would have to seek the approval of the competent authority back home before signing the agreement.
“This is the preliminary stage to launch the project. This (agreement) has to be signed to move forward. Then various companies will come forward, a consortium will be formed, commercial terms will be settled and then further agreements will be signed,” the secretary said.
Recently, the ADB had indicated to develop a mega gas pipeline network in South Asia, involving Pakistan, Turkmenistan, Afghanistan, Iran and India.
India currently requires 5-6 billion cubic feet (BCF) per day of gas and the market will be growing further and it might need gas intakes from both the pipelines, one each from Iran and Turkmenistan.
The trans-Afghanistan Turkmen pipeline promises substantial royalty and security fees to Afghanistan, long-term guaranteed supply to Pakistan and of course, sale revenue to Turkmenistan besides a chain generation of economic activity throughout the region.
The ADB feasibility study would also determine the fresh estimates of the cost given the fact that the old estimates of $3.2 billion might have become outdated, an official said.
It was established in July that Daulatabad gasfield had total reserves of 45 TCF of which remaining recoverable reserves stood at 23 TCF.
At a rate of 15 million cubic feet per day supply to India or Pakistan, this amount of gas is sufficient for 30 years. Turkmenistan has recently made some fresh discoveries around the Daulatabad gasfield.
The ADB has asked Turkmenistan for the quantity of fresh discoveries so that the final cost estimates and long-term demand-and-supply estimates could be made for the region.
Early this week, Pakistan allowed Russian energy firm Gazprom to carry out the pre-feasibility study, i.e. without a survey and mapping, of another gas import option that aims to take Iranian gas to India through Pakistan.
President Pervez Musharraf, said an official, had asked the petroleum ministry to keep all the options of gas import open and sign an MOU with Russia without undermining the trans-Afghanistan gas pipeline from Turkmenistan to Pakistan.
