ADB initiative to revive TAP gas pipeline project
By Ihtasham ul Haque
March 25, 2008 issue
ISLAMABAD, March 24: The Asian Development Bank (ADB) is “regrouping” officials of Turkmenistan, Afghanistan and Pakistan in the third week of April to revive the TAP gas pipeline project in view of the energy shortage in the region.
Sources in the Ministry of Petroleum and Natural Resources told Dawn on Monday that India was willing to attend a meeting of steering committee of the $6 billion, 2,000km-long project in which it has the status of an observer.
However, the sources said there were still challenges to the project.
They said that the security situation in Afghanistan and relations between Pakistan and India needed to be improved and fuel subsidies in the two countries would have to be phased out.
Above all, the long-term competitive advantage of the TAP over the option of Liquefied Natural Gas (LNG) has to be determined.
The TAP pipeline of 56-inch diameter needs at least 30 billion cubic metre (BCM) of gas per year from Turkmenistan to reach Pakistan via Afghanistan.
The sources said that an earlier steering committee meeting of the TAP project, scheduled for Nov 27-28 last year, did not take place after Turkmenistan signed an agreement with Russia?s gas giant Gazprom to increase gas supplies to Europe at enhanced rates.
The sources said that senior Pakistani officials had been informed by Iran that it had sorted out 40 to 50 per cent “logistic issues” to undertake the work on the Iran-Pakistan-India gas pipeline project.
Pakistan asked Iran earlier this month to finalise the project by April because of its rising gas requirements. And Iran said it was holding final talks with India to persuade it to join the project. Iran has told Pakistan that if India continued to show its reluctance under the US pressure to join the project, Iran will invite China to join the project.
“Chinese have told us that they are ready to join it,” a source said. Pakistan has asked Iran to enhance the volume of gas to be supplied by 50 per cent if India opts out of the deal.
And in that case Pakistan will be making a formal request to the Iranian side to allocate an additional volume of 1.05 BCFD (billion cubic feet of gas per day).
Pakistan is to get a total of 2.1 BCFD of gas from the IPI project and India 3.2 BCFD. If India stays away, the pipeline length will come down to about 1600km, reducing the project cost. The volume of gas that Pakistan will get will increase to about 3.2 BCFD.
The sources said that the government was working on yet another project to meet its growing gas requirements. The Sui Southern Gas Company was accelerating work on developing an LNG terminal in Karachi. Next month, the sources said, a contract would be awarded for developing the terminal for which “floating storages” were being procured for fast-track import of gas from Qatar and other countries. Korea and Japan have developed this system and Pakistan wanted to follow suit by acquiring special vessels. Instead of exporting raw gas, Qatar will be adding value and export LNG to get a better price.