TAPI pipeline company set to launch

By bne IntelliNews July 12, 2013

bne -

A company to develop the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline is due to be set up by September, as the four participating governments accelerate plans to build the 1,680km route through one of the most unstable regions in the world.

A protocol setting out plans to set up and register a Dubai-based special purpose vehicle - the TAPI Ltd consortium - was signed during a meeting of ministers from the four participating countries in Ashgabat in early July, it is reported. Each country will contribute $5m to the company.

TAPI Ltd will be responsible for finding an international oil and gas company to manage the project, after the Indian government insisted that an oil major be brought in. The hunt for a consortium leader is likely to be tough however. A series of roadshows in 2012 already failed to find a candidate.

Turkmenistan-Afghanistan-Pakistan reportedly insist that the pipeline can be built without international help. However, New Delhi is holding out for such a project leader. According to an Indian petroleum ministry report, ministers from the four countries have now agreed that the Asian Development Bank (ADB) - which is acting as technical consultant as well as providing finance - will select a company from a "neutral country" to "drive the project," local press reports.

TAPI is planned to deliver gas from Turkmenistan's Caspian oilfields to India and Pakistan via Afghanistan. The cost of the pipeline is expected to be up to $12bn, though this will depend on the security situation, both in Afghanistan and parts of Pakistan.

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