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March, 29 2015
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Turkmenistan to woo investors for Tapi gas project

A gas pipeline.—File Photo
A gas pipeline — File Photo

ASHGABAT: Turkmenistan, holder of the world's fourth-largest natural gas reserves, said on Saturday it would hold roadshows in September-October for investors willing to take part in the TAPI project aimed to ship Turkmen gas to India via a trans-Afghan pipeline.

Turkmenistan agreed in May to supply natural gas to Pakistan and India via Afghanistan by signing gas sales and purchase agreements with Pakistan's Inter State Gas Systems and Indian state-run utility GAIL.

The US-backed, 1,735-km Tapi, named after the initial letters of the participant nations, is a major boon for Turkmenistan which is seeking to diversify its energy exports from its traditional market, Russia.

The project also promises major benefits to energy-hungry regional rivals India and Pakistan.

“The Tapi project will ensure long-term (annual) shipments of over 30 billion cubic metres (bcm) of Turkmen natural gas to the countries of Southeast Asia,” state television showed Turkmen President Kurbanguly Berdymukhamedov as telling a government meeting late on Friday.

Souring official optimism, many analysts point to Tapi's 735-km (450-mile) leg that would run through the Afghan provinces of Herat and Kandahar, adding that the project would face significant security problems after a planned pullout of US-led Nato troops from Afghanistan in 2014.

Berdymukhamedov, whose Central Asian nation of 5.5 million people is listed by human rights bodies among the most reclusive and repressive in the world, made no mention of the security challenges facing the long-touted Tapi.

“This will help the economic growth of the Tapi participant states and, more importantly, will contribute to regional peace, stability and security,” said Berdymukhamedov, who enjoys vast  powers and a rising personality cult in his ex-Soviet country.

Yagshygeldy Kakayev, head of the state agency for hydrocarbon resources — the body responsible for distributing licences — told the same government meeting that roadshows for potential investors would be held in Singapore, New York and London and would last for 18-20 days in September and October.

The Asian Development Bank had said the Tapi pipeline was estimated to cost at least $7.6 billion back in 2008. Analysts and officials now say it could cost between $10 billion and $12 billion to construct.

According to estimates by industry experts and government officials, Turkmen gas supplies to Pakistan could begin in 2016 and to India in 2018. Turkmenistan is promoting Tapi as a key element in plans to boost its annual gas exports to 180 bcm by 2030.

Turkmenistan does not disclose data for its current gas exports. BP estimates show that last year the country produced 59.5 bcm of natural gas and consumed internally 25 bcm.

BP data show Turkmenistan's natural gas reserves are behind only Russia, Iran and Qatar.

The country aims to supply gas from its Galkynysh field, better known by its previous name, South Iolotan. Auditor Gaffney, Cline & Associates has ranked the field the world's second largest, with gas reserves of between 13.1 trillion and 21.2 trillion cubic metres.


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