France in fray to push TAPI gas deal

The French energy giant TOTAL has shown an interest in steering the cash-strapped Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project, despite grave security concerns that have so far dashed hopes of forging energy linkages between Central and South Asia.

“No party has been willing pitch in the required capital that would be sufficient to energise the project,” a highly placed source told The Hindu.

However, TOTAL, has now shown an inclination to lead a consortium, with the backing of the Asian Development Bank (ADB), which would play a key advisory and facilitating role to help get the project off-ground.

If implemented, the TAPI pipeline project would originate at the Yolotan Osman fields in Turkmenistan, from where gas would be transited through Herat and Kandahar in Afghanistan, before passing through Quetta in Pakistan. It will make landfall in Fazilka, after channeling through Multan in Pakistan.

The project received official backing from the supplier country, Turkmenistan, and the receiving countries — Afghanistan, Pakistan and India, in 2010. Following state-backing, specific companies have come together to sign bilateral sales and purchase agreements with Turkmenistan, the supplier. The ADB stepped in as the Transaction Advisor, after sufficient groundwork among the interested parties had been completed, which has subsequently included a decision to form of TAPI Ltd., a Special Purpose Vehicle that would be registered in New Jersey.

“The TAPI project has a western-backed orientation, but in India, this is not an overriding factor so long as in the end, we get the gas,” the source said.

While it explores a role as a consortium leader to build the 1,750-km pipeline, TOTAL is looking for a stake in the gas-field in Turkmenistan which has estimated reserves of 16 trillion cubic feet.

The authorities in Turkmenistan are showing urgency to launch the project by seeking a detailed dialogue between the French company and ADB.

The Indian side, while being fully in the loop, is still skeptical about the future of the project, mainly on account of the frayed geopolitical situation in Afghanistan and Pakistan. The rise of the Taliban in Afghanistan and Pakistan, coupled with the withdrawal of the American forces from Kabul, is discouraging early investments in the $10 billion project, the source observed.

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Printable version | Sep 19, 2021 5:30:28 AM |

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