GAIL to join consortium building $7.6 billion TAPI gas pipeline

State-run GAIL India Ltd will be part of a consortium that will build the $7.6 billion Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline.

The consortium comprising national oil companies of the four countries will build and operate the 1,680 km pipeline from Dauletabad gas field in Turkmenistan to India through Afghanistan and Pakistan, officials said.

The participating countries will together float a special purpose vehicle (SPV) for the purpose. International companies are also likely to join in laying and operation of the pipeline.

This was decided at the steering committee meeting of TAPI project, called by the project sponsor Asian Development Bank in Islamabad last week.

The TAPI pipeline will run from the Dauletabad gas field in Turkmenistan to Afghanistan and from there alongside the highway from Herat to Kandahar and then through Quetta and Multan in Pakistan to Fazilka in India, near the border with Pakistan.

Under a draft framework agreement signed by oil ministers from Turkmenistan, Afghanistan, Pakistan and India last week, the pipeline will transport 100 million standard cubic metre per day of gas from the Dauletabad gas field, of which India will get 60 million standard cubic metre.
 
The project cost, estimated at $3.3 billion in 2004, has more than doubled to $7.6 billion now, mainly due to rising steel prices. Actual construction work of the TAPI gas pipeline project will start in 2010.

Talks on the TAPI gas pipeline project have been underway since 2002. In 2006 India was invited as an observer. India last week formally joined the US-backed project to meet its growing energy needs.

Rival Iran-Pakistan-India gas pipeline is to be built by the three nations separately in their respective territories.