India signs agreement for gas supply with Turkmenistan | SupportBiz

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India signs agreement for gas supply with Turkmenistan

India has signed a gas sales and purchase agreement (GSPA) with Turkmenistan for the USD7.6-billion Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project. "For us, the signing of the GSPA is no ordinary event," India's Minister of Petroleum and Natural Gas S Jaipal Reddy said at an event after the signing of the agreement.

"While the GSPA could be construed by some as a mere contractual document, for us, this particular GSPA is a triumph of multilateralism, regional cooperation and economic integration," Reddy added.

He said that the TAPI project would immensely benefit the energy-starved economies in the region.

"I would like to congratulate the petroleum ministers of Turkmenistan, Afghanistan and Pakistan for their vision, patience and tact for making a project of this magnitude happen in a region undergoing severe socio-political stress," he said.

A representative of GAIL (India) signed the GSPA with Turkmenistan's national oil company TurrnenGas in the presence of the petroleum ministers of the two countries.

India's cabinet, after a meeting chaired by Prime Minister Manmohan Singh recently, had approved the agreement.

The proposed 1,680km pipeline is estimated to cost almost USD7.6 billion.

Nearly 800km of the pipeline will pass through Pakistan, while 144km will be in Turkmenistan and 735km in Afghanistan.

The pipeline is expected to be operational in 2018, and will supply gas for over 30 years.

It will have the capacity to carry 90 million metric standard cubic metre per day (MMSCMD) of gas, with 38 MMSCMD each for India and Pakistan and the remaining 14 MMSCMD for Afghanistan.

Afghanistan and Pakistan have committed to the safety and security of the pipeline through the Inter-Governmental Agreement and the Gas Purchase Framework Agreement signed among the four countries in December 2010.

"Hopefully, the spin-off benefits of this pipeline will encourage us to emphasise trade and investment issues over contentious political issues, and enable us to build trust and confidence among ourselves as neighbours and partners in progress," Reddy said while addressing the 3rd Turkmenistan Gas Congress.