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To tap new gas supplies, the government has asked all major oil and gas companies to kickstart a feasibility study on exploring the giant Galkynysh gas field located in Turkmenistan.
Though India is pursuing the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project, a stake in the gas field could further strengthen gas supply from the central Asian country.
The energy security division under the ministry of external affairs (MEA) met last week on the proposed TAPI project, where some of the major Indian oil and gas companies were invited to discuss the potential and feasibility of acquiring stake in the Galkynysh gas field, also being eyed by other international oil companies. In the meeting, it was decided the feasibility study might start by next month, MEA officials told Business Standard.
The multi-billion dollar TAPI project had failed to take off in 2006, when the Turkmenistan government refused to grant upstream rights to international oil firms for exploring the Galkynysh gas field, which is the source of the project. The Galkynysh gas field is regarded as the world's second largest. But now, in an attempt to bring back investors’ interest in the transnational TAPI project, the government of Turkmenistan has granted upstream rights to international firms to acquire a stake there, something not officially permitted according to their (Turkmen) government's policy.
Earlier this month, Minister for Petroleum and Natural Gas, M Veerappa Moily said Turkmenistan has agreed to consider offering a stake in the giant field and it would be built by an international consortium in which, India would also have equity participation.
“A positive ambience for the Steering Committee meeting was created by signing of the Gas Sales and Purchase Agreement that had, so far, been pending between Afghanistan and Turkmenistan, thereby completing the explicit commitment of all four countries involved in the project,” Moily said after attending the 17th steering committee meeting of the TAPI project on July 11.
Turkmenistan, Afghanistan, Pakistan and India are also expected to soon sign a transaction advisory deal with the Asian Development Bank (ADB) in order to generate $7.5 billion from leading investors for financing the TAPI pipeline to meet growing energy needs.
The ADB, however, had some reservations about the project in 2008 and said the cost of building the pipeline might surge exponentially, making the project financially nonviable, said an official.
The proposed 1,735 km pipeline would run from the South Yolotan Osman fields in Turkmenistan to Afghanistan, where it would follow the highway running from Herat to Kandahar, and then via Quetta and Multan in Pakistan, with the final destination being Fazilka in Punjab, India.
The pipeline would be able to transport up to 30 billion cubic metres of natural gas annually from Turkmenistan to the participating countries and the agreement signed last week envisages the transport of 90 million standard cubic metres per day (mscmd) of Turkmen gas, with deliveries of 38 mscmd to Pakistan, 38 to India, and 14 to Afghanistan.
