Turkmenistan to invest $25bn to deliver 3.2bn BCFD gas

Worker at natural gas booster station, sunset, silhouette

ISLAMABAD: Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi said on Tuesday that Turkmenistan would invest around $25 billion to deliver around 3.2 billion cubic feet per day (BCFD) of gas, for 25 years, to three energy hungry countries — Afghanistan, Pakistan and India — from December.

Addressing a news conference here, the minister claimed that the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project was the largest yet project in the world. It is one of the achievements of the PML-N government that a project for 25 years is being taken up with the commitment of the Turkmenistan government to make such a huge investment.

He said the project was previously hampered by security situation in Afghanistan and Turkmenistan laws which did not allow foreign companies to develop its onshore oil and gas resources.

The Turkmenistan government had decided to develop Gylkynish and adjoining gas fields itself with $10-15 billion that would have around 21 trillion cubic meters of gas that was larger than Pakistan’s all oil and gas resources put together.

He said Turkmenistan would also be responsible for around $10 billion investment required for 1,680-kilometre pipeline of 56-inch diameter for which it had already constituted a consortium with some Japanese companies. The state-run Turkmengaz will be the consortium leader.

The minister said the gas sale and purchase agreement had already been signed in 2013 that set the pricing mechanism under which gas price at Turkmen border would be around 20 per cent less than that of Brent crude. At current rate, the gas sale price would be around $3.2 per million British Thermal Unit (MMBTU). It will finally translate into $6.5 per MMBTU after inclusion of tolling tariff and transit fee to be paid to Afghanistan. This would be slightly less than the proposed Iranian gas rate because of larger quantities.

He said Pakistan and India each would get 1.325 BCFD of gas while Afghan share had been set at 500 MMCFD. Under the agreement, Turkmensitan is to achieve financial close for the project by December next year for simultaneous completion of gas field development and pipeline construction in three years i.e. by December, 2019.