India to join US-sponsored Central Asian pipeline project

New Delhi: Even as it has been going slow on the $7-billion Iran-Pakistan-India gas pipeline, India has decided to formally join its rival, the US-backed Turkmenistan-Afghanistan-Pakistan gas pipeline project next month.

The US, which has frowned on India''s involvement with Iran on the pipeline project, has instead pushed for India to import natural gas from Turkmenistan transiting through Afghanistan and Pakistan and then to India to meet its growing energy needs.

As a result, the fate of the Iran-Pakistan-India pipeline project, India did not attend the recent trilateral official level talks in Tehran over unresolved transit issues with Islamabad. (See: Iran-Pakistan-India pipeline talks start sans India)

Apart from the formal inclusion of India in the project, the Asian Development Bank, which is the project sponsor for the Turkmenistan-Afghanistan-Pakistan gas pipeline project, has scheduled a project steering committee meeting to be held in Islamabad on 28-29 November where India is expected to sign the four-nations pact on the gas pipeline and a framework agreement.

The four countries are expected to commission a project feasibility study and evolve a financing structure after signing of the ''Heads of Agreement'' (HoA). Turkmenistan, which says it has gas reserves of 159 trillion cubic feet at its Daulatabad fields, is earmarking 34.26 tcf for the project.

Pakistan has expressed itss requirement for 15 million standard cubic meters of gas per day through the pipeline in the first year, 30 mmscmd in the second and 45 mmscmd annually in the third year and onwards. Of the 45 mmscmd gas allocated for India and Afghanistan over the 30-year project life, Kabul would take 5 mmscmd in the first year, rising to 14 mmscmd by the fifth year.

The national oil companies of the four countries will form a consortium to build the pipeline by 2011-12.

The draft gas pipeline framework agreement provides for payment of transit fee to Afghanistan and Pakistan for allowing the pipeline to transit their territories at an internationally accepted "cost-of-service" tariff. Moreover, they will not levy any direct or indirect taxes, royalties, value added tax, duties and other payments either during the implementation of the project or on the transportation and transit of natural gas from their territories. They will, however, be at liberty to tax the sale of gas in their own territories.