Investment agreement on TAPI signed
By Fatma Babayeva
Shareholders of the TAPI Pipeline Company Ltd. international consortium have concluded an investment agreement on the construction of the Turkmenistan-Afghanistan-Pakistan-India gas pipeline project.
The relevant agreement, which was signed in Ashgabat on April 7, is expected to pave the way for long-term gas sales that will allow Turkmenistan to diversify its gas export markets and support growth.
The agreement provides an initial budget of over $200 million to fund the next stage of implementation of the TAPI pipeline project.
This includes funding for detailed engineering and route surveys, environmental and social safeguard studies, and procurement and financing activities, to enable a final investment decision, after which construction can be started.
Construction is estimated to take up to 3 years.
It is expected that this agreement will help more accurately determine the total investment required for the construction of the entire pipeline in a long term.
Yagshigeldy Kakayev, the Deputy Chairman of the Cabinet of Ministers of Turkmenistan, believes that the TAPI pipeline represents an unprecedented level of regional cooperation between the participating states of the project in meeting the energy needs of the region. It will contribute to strengthening economic growth in the region as well.
The TAPI consortium will build, own, and operate the pipeline, which once completed, will transport up to 33 billion cubic meters of natural gas annually from Turkmenistan for the next 30 years. The pipeline stretches about 1,600 kilometers from the Afghan/Turkmen border to the Pakistan/Indian border.
TAPI will extend from Galkynysh field in Turkmenistan through the Afghan cities of Herat and Kandahar, and along to its final point at a settlement along the Pakistani-Indian border.
The basic document for the TAPI project is an intergovernmental agreement signed in Ashgabat in 2010. The practical implementation of the project has started actually since that time.
A solemn launching ceremony of the Turkmen section of the TAPI was held in mid-December last year.
The implementation of the TAPI pipeline will not only contribute to Turkmenistan’s economic gross and diversification of its gas export route, but also enhance energy security in the region. Its construction will help to improve energy security in Afghanistan, Pakistan and India.
The ADB experts believe that TAPI will unlock economic opportunities, transform infrastructure, diversify the energy market for Turkmenistan, and enhance energy security for the region.
Its implementation of the project will strengthen Turkmenistan's independence, and as a result its gas supplies to world markets will significantly increase.
Experts believe that the implementation of the TAPI pipeline project would represent an enormous breakthrough for Turkmenistan's capabilities as an international energy player.
TAPI is also seen as an opportunity to pave the way for stability in Afghanistan and could contribute to the rehabilitation of the war-torn country.
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Fatma Babayeva is AzerNews’ staff journalist, follow her on Twitter: @Fatma_Babayeva
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