In what could be a major breakthrough in the progress of the much delayed Turkmenistan Afghanistan Pakistan India (TAPI) gas pipeline project, the Turkmenistan Government has almost zeroed in on French energy entity Total SA as the consortium partner for managing the project.
During the meeting of the four member nations which took place in Islamabad last week, the Turkmenistan Government is learnt to have shown interest in engaging Total as the prospective partner in the project.
Sources privy to the development told The Pioneer that leaving aside initial differences, the Turkmenistan Government is said to have softened its stand on Total SA, and by the second week of March 2015, a final decision on finalising the French entity could be taken.
The meeting in Islamabad was mainly held to set a final deadline for finalising the consortium partner, as the delay in selecting the consortium partner has been a major impediment in kick starting the project. It was decided that the partner should be finalised by March 2015 so that things can move further on the project.
Sources said that there could be two consortiums, one involving the Turkmenistan Government and Total - which will govern the upstream operations, and the second one will include most probably Total and two other private entities - which will manage the project.
They added that with Total’s involvement as consortium partner almost final, the Turkmenistan Government is now engaged in talks with the remaining two entities, which will be part of the second consortium. A Chinese and a Russian entity are said to be showing interest in being part of the consortium, which could be led by Total.
The consortium partner will lay and operate the pipeline. Official sources said that once the partner is finalised, then issues related to downstream operations which involved India, as it is going to be a beneficiary of gas supply, will be resolved quickly.
French giant Total SA had initially envisaged interest in leading a consortium of national oil companies of the four nations in the TAPI project. However, it backed off after Turkmenistan refused to accept its condition of a stake in the gas field that will feed the pipeline.
During the previous meeting of the four nations which took place in Ashgabat - the Turkmenistan capital - in November last year, the deadlock had remained between Total and Turkmenistan Government.
Though there is still no clarity whether Turkmenistan will accept Total’s condition, sources said that the Central Asian nation has shown some leniency in its stand and talks between the two parties have shown some positive growth.
Since the four state-owned firms, including GAIl of India, neither have the financial muscle nor the experience of cross-country line, an international company that will build and also operate the line in hostile territories ofAfghanistan and Pakistan, is needed.
Sources said Turkmenistan has so far maintained that its law does not provide for giving foreign firms an equity stake in upstream gas field, without which western energy giants will not be interested to take the risk.
During the 20th Steering Committee meeting of TAPI project in Islamabad last week, Petroleum Minister Dharmendra Pradhan had articulated the need for the project to be a win-win proposition for all participating countries.
The TAPI pipeline will have a capacity to carry 90 million standard cubic metres a day (mmscmd) gas for a 30-year period and will be operational in 2018. India and Pakistan would get 38 mmscmd each, while the remaining 14 mmscmd will be supplied to Afghanistan.