Client body formed for 1,800 km TAPI gas pipeline

The four state gas companies of Turkmenistan, Afghanistan, Pakistan, and India have established a company that will build, own and operate the planned 1,800 km Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline. Turkmengas, Afghan Gas Enterprise, Inter State Gas Systems (Pakistan), and Gail (India) own equal shares in the company.

The TAPI pipeline is expected to export up to 33 billion m3 of natural gas a year from Turkmenistan to Afghanistan, Pakistan, and India over 30 years of operation. According to the Asian Development Bank (ADB), which is the transaction advisor to the project, Turkmenistan has the world’s fourth-largest proven gas reserves. The pipeline is designed to allow the landlocked country to diversify its gas export markets to the southeast while providing a new source of fuel for southern Afghanistan, Pakistan, and northern India.

Klaus Gerhaeusser, director general of ADB’s central and west Asia department said, “Establishment of the TAPI pipeline company is a key milestone in the development of the pipeline. It is a tangible sign of transformational cooperation among the parties that presages the enhanced energy security, business prospects, and overall peace and stability in the region promised by the pipeline.”

The next major milestone in the project is expected to be the selection of a commercial consortium leader to spearhead the construction and operation of the pipeline. When selected, the commercial consortium leader is likely to take a substantial stake in the client company.