Turkmen deal boosts Afghan pipeline project

May 23, 2012 - 3:57 AM

ASHGABAT, Turkmenistan (AP) — Turkmenistan signed a natural gas deal with Pakistan and India on Wednesday, in a significant boost to the proposed construction of a 1,800-kilometer (1,100-mile) pipeline across Afghanistan.

Representatives from India's state-owned Gail Ltd. and Pakistan's privately run Pakistan's Inter State Gas System traveled to Turkmenistan to formalize the deal, which will see the two countries receive gas through a pipeline projected to pump 90 million cubic meters (3.18 billion cubic feet) a day. They hope the gas supplies will help to meet their growing energy needs, which are set to double by 2030.

"This is a truly historic moment of unparalleled regional cooperation," said Klaus Gerhaeusser, director general of the Asian Development Bank's Central and West Asia department. "Each country stands to gain, making this not only the 'Peace Pipeline,' but a pipeline to prosperity as well."

Turkmenistan and Afghanistan have not reached a sales agreement, but the two countries have signed a memorandum of understanding on long-term gas cooperation, according to the Asian Development Bank, which has been brokering negotiations over the construction over a regional pipeline for a decade.

Information on prices and the amount of gas to be purchased by specific nations has not been made public. Media in Pakistan have cited the country's petroleum minister as saying the gas would cost less than was being paid for Iranian gas.

It has been widely assumed that gas for the pipeline, which will run through Afghanistan, Pakistan and end up in India, is to be sourced from the Dauletabad field in southern Turkmenistan.

An official from the state gas company told The Associated Press earlier this month, however, that a portion of the fuel will eventually be drawn from the vast and yet-to-be developed South Yolotan field near the Afghan border.

Independent British auditor Gaffney, Cline & Associates estimates that South Yolotan may hold up to 21.2 trillion cubic meters (750 trillion cubic feet) of gas, potentially making it the second largest reserve of gas in the world after the South Pars field, shared between Iran and Qatar.

With the deal in place, the challenge of building a gas route through some of the world's most dangerous territories remains.

The Asian Development Bank said in a statement that the four countries involved in the project will seek commercial partners to build, finance, and operate the $7.6 billion pipeline.

While pursuing plans to open up new markets on its immediate border, Turkmenistan is also pushing ahead with expanding capacity for gas transportation routes to China, which traverse neighboring Uzbekistan and Kazakhstan.

Turkmenistan began supplying gas to China through a newly completed pipeline in late 2009. That pipeline and a second route that came online in June is expected to take full annual capacity to 40 billion cubic meters (1410 million cubic feet) by 2015.

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Associated Press writer Peter Leonard in Baku, Azerbaijan, contributed to this report.