India Authorizes to Sign TAPI Gas Sales and Purchase Pact

• Category: Turkmenistan, Afghanistan
NEW DELHI (RTTNews) – The Indian Cabinet allowed state-run gas-firm GAIL (India) Ltd to sign the Gas Sale and Purchase Agreement or GSPA with TürkmenGaz, Turkmenistan’s national oil company, for the $7.6 billion TAPI Gas pipeline project. Next week, the four countries will meet to decide on a final agreement on transit fee.

Unlike the Iran-Pakistan-India (IPI) pipeline project, TAPI has been supported by the US. A steering committee meeting of the member countries is expected to take place in Turkmenistan soon. The import of gas is scheduled to commence after five years of the signing of GSPA.

Member countries of the TAPI project have agreed transit fee which is expected to be about 50 ¢. The transportation charges will be finalized when the project gets implemented by the consortium and all costs are known, sources close to the development said.

The provisions of the GSPA have been structured to protect India’s commercial interests as India is at the tail end of the pipeline. Afghanistan and Pakistan have committed to the safety and security of the pipeline through the Inter-Governmental Agreement and the Gas Purchase Framework Agreement signed among the four countries in December, 2010.

The other pipeline project India has been involved with has been delayed over price and transportation fees that India would have to pay Pakistan. Talks on the 2,300km Iran-Pakistan-India (IPI) pipeline started in 1995, but with India clinching the civilian nuclear agreement with the US, the process slowed. Iran and Pakistan decided to go ahead with the project without India, and have even extended a partnership offer to China. The last trilateral meeting on the IPI pipeline involving Iran, Pakistan and India was held in July 2007.

India, Asia’s third largest oil consumer, imports about 80% of its oil needs while falling local gas output has forced it to buy costly liquefied natural gas.