x Abu Dhabi, UAEWednesday 26 July 2017

Investors sought for for Turkmen gas pipeline

Turkmenistan is actively seeking investors for a planned Dh30bn, 1,700km pipeline to transport its gas through Afghanistan to India and Pakistan.

Turkmenistan is actively seeking investors for a planned Dh30 billion (US$8.16bn), 1,700km pipeline to transport its gas through war-torn Afghanistan to India and Pakistan.

Sakhatmurad Mamedov, the head of the state-owned company Turkmengaz, announced at the weekend that the Tapi (Turkmenistan-Afghanistan-Pakistan-India) project had been "successfully pushed forward" in roadshows held in September with potential investors in Singapore, New York and London.

Turkmen officials speaking at an oil and gas conference in the capital Ashgabat that endedlast week, took every opportunity to talk up the pipeline.

"The realisation of the Tapi pipeline project will allow an increase in exports of Turkmen gas," Gurbanguly Berdymukhamedov, the Turkmenistan president, told the conference.

The pipeline plan is backed by the Asian Development Bank (ADB) and aims to transport more than 30 billion cubic metres of gas annually from Turkmenistan to consumers in Pakistan and India and relieve shortages in Afghanistan.

Turkmenistan in May signed sale-purchase agreements with India and Pakistan for the pipeline in a move hailed by the United States as a boost for regional integration.

Much of the pipeline will go through Afghanistan.

According to the ADB, the pipeline in 2008 was estimated to cost at least $7.6bn and the partners are now seeking commercial partners to build, finance and operate Tapi.

The project enjoys the support of the US, which is keen to deter the Indian subcontinent from dependency on energy from Iran.

Lynne Tracy, of the US state department Asian affairs unit, told the conference that Washington welcomed the progress made on the project even if the road ahead was a long one. According to the British auditors Gaffney, Cline and Associates, Turkmenistan has the second-largest gas reserves in the world.

These are being eyed eagerly not just by Asian states but also the European Union, which wants to reduce its dependence on Russian imports.

Turkmenistan, Azerbaijan and the EU are continuing to negotiate an agreement for the construction of a TransCaspian pipeline for exports of Turkmen gas to Europe.

Patricia Flor, the EU's special representative for central Asia, urged an acceleration of the project, saying it would be better to sign long-term contracts now than in five years.

Ms Tracy said the US also supported the TransCaspian pipeline and, in a veiled reference to Russia, said that if Turkmenistan and Azerbaijan agreed on a pipeline crossing only their territorial waters, no other country had veto power over that decision.

Turkmenistan is also keen on diversifying its export routes, which remain dependent on Russia, with whom it has occasionally had prickly relations. Turkmenistan already exports gas to China through its 3,666km Central Asia-China gas pipeline that ends at Horgos, in the Xinjiang region.

On Thursday, the Russian energy giant Gazprom signed a final deal with Bulgaria to build the Bulgarian stretch of its €16bn (Dh75.16bn) South Stream pipeline to bring Russian natural gas to Europe, in part along the Black Sea seabed bypassing transit countries, the company said.

The deal crowns the company's efforts to sign final investment decisions on the South Stream gas pipeline's overland sections in Bulgaria, Hungary, Serbia and Slovenia, and its offshore section in the Black Sea.

The South Stream pipeline will transport up to 63 billion cubic metres of natural gas to central and southern Europe.

Work on the project is due to start next month and the pipeline's commercial deliveries of natural gas to Europe are expected to start in the first quarter of 2016.

* compiled from AFP and Reuters