In a development that is likely to give a big impetus to the strategic Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project, India, Pakistan, Afghanistan and Turkmenistan have agreed to form a company for execution of the project and give it shape by September this year.

“The strategic TAPI pipeline project which will transport gas from Turkmenistan to Afghanistan, Pakistan and India has gathered momentum with the Petroleum and Energy Ministers of the four nations agreeing to form a company by end-September this year to execute the ambitious plan. Asian Development Bank (ADB) has been appointed as legal-technical consultant and it will soon identify a company which will drive the project. The company will be from a neutral country,’’ top sources in the Petroleum Ministry told The Hindu.

A decision on this issue was taken during the meeting Petroleum and Natural Gas Minister, Veerappa Moily, had with Rashid Meredov, Deputy Prime Minister and Foreign Minister of Turkmenistan, during his visit to Ashgabat late last week. Mr. Moily was in Ashgabat to participate in the meeting of the Steering Committee on the TAPI gas pipeline project.

Following the meeting of the Steering Committee, a protocol was signed in which the parties fixed the decision on the need to prepare founding documents and the registration of the TAPI Ltd. consortium as well as signing an agreement for a transaction adviser for the TAPI project.

India has already approved setting up of a special purpose vehicle to build the TAPI gas pipeline as the multinational firms did not come forward to build the project. The Dubai-based SPV, TAPI Ltd, will scout for consortium leader who will build and operate the project, arrange for finances and would be responsible for safe delivery of gas through the pipeline that will traverse militancy-infested areas in Afghanistan and Pakistan.

TAPI Ltd is required to have an initial contribution of $20 million that is $5 million from an identified entity from each of the four participating countries. While Turkmenistan, Afghanistan and Pakistan were of the view that the four promoters could build and operate the pipeline on their own, India has insisted that the project be taken up only if a multinational company leads it. New Delhi does not want to be at the mercy of Afghanistan and Pakistan for its gas needs and also feels that none of the nominee companies of the four countries have the financial and managerial capability to execute the project.