As you know, an important aspect of the energy strategy of Turkmenistan is to expand the geography of export routes of Turkmen energy supplies to world markets, including through the creation of multiple transport infrastructure. In this area we are implementing major investment projects, among which a special place is the construction of a gas pipeline Turkmenistan—Afghanistan—Pakistan—India (TAPI).
On the progress of this project, considerable international significance, we are asked to tell the representative of the State concern “Turkmengaz” the Board of Directors of the company “TAPI Pipeline Company Limited” Muhammetmurad Amanov.
I recall that in the active phase of the TAPI project came in 2010, when Ashgabat was signed a quadripartite intergovernmental agreement for this project. Then, from 2012 to 2016 years, the legal framework of the project consistently replenished Agreements of purchase and sale of natural gas to all buyers, and joint investment Agreements.
In 2013, the Government of Turkmenistan, Afghanistan, Pakistan and India appointed its state gas company to promote and invest in the TAPI project.
The project includes a complex of works on designing, procurement, construction, operation and maintenance of the pipeline with a length of 1840 km from Turkmenistan to Afghanistan, Pakistan and India. It is envisaged that after full commissioning of the TAPI will export up to 33 billion cubic meters of natural gas a year for 30 years.
This project can definitely be attributed to a small number of projects of international scale. He will have a stimulating effect sustainable development, social and economic growth of countries in the region and ensure their energy security. These factors, in turn, are the “pillars” on which rests the modern architecture of the energy space.
In a relatively short period of time significant progress has been made in the implementation of the TAPI project, in particular on such key agreements as the Agreement with the host Governments and an Agreement to transport natural gas. A powerful impetus to the progress of the project was given with the establishment of the consortium “TAPI Pipeline Company Limited” and subsequently the choice of the State concern “Turkmengaz” as leader of this consortium.
Let me remind you that the start of the TAPI gas pipeline was started in December 2015 in Mary. In a solemn ceremony on the occasion of the first seam welding of the symbolic “Golden link” – a new gas transportation artery was attended by the Presidents of Turkmenistan and Afghanistan, top officials of India and Pakistan. The gasket 214-Kilemetropole phase of the gas pipeline on the territory of our country is performed by state Concern “Turkmengas”, fully complete all work scheduled for the end of 2018.
In October 2016, an Agreement was signed by the Government of Turkmenistan and the Islamic development Bank to Finance the project of construction of the Turkmen part of the pipeline TAPI. The document provides for the allocation of credit in the amount of 700 million U.S. dollars.
In November in Riyadh, hosted a regular meeting of the intergovernmental Turkmen-Saudi Commission on trade-economic cooperation with participation of leaders of industry and energy, as well as major companies in Saudi Arabia. During the meeting the sides discussed issues of trade – economic and investment cooperation, including the energy industry, agreed on a number of fronts. In particular, the state Concern “Turkmengas” signed an agreement with “Global Pipe Company” for delivery in 2018, a large consignment of pipes intended for the construction of TAPI.
As is known, the resource base for TAPI at the initial stage will be the largest field “Galkynysh”. In the frame of development of this field by the State concern “Turkmengaz” together with foreign partners does considerable work aimed at high .level to provide with “blue fuel” TAPI.
I also want to highlight other achievements. So, at the stage of negotiations of the project agreement that will be concluded with governments and government contractors. Among them, the most priority is an agreement with the host Governments.
We have completed the tender process for the selection of contractors for implementation of the detailed route survey on the route of the pipeline. Key surveys, such as impact assessment and social environment, and developing a plan for land allocation are already under implementation with the Afghan and Pakistani areas.
Performed preliminary design for the pipeline and all stations, which is more known as a Front-End Engineering & Design. Started the tender process for the selection of suppliers of equipment of long manufacturing – as the main pipe and large valves, as well as contractors for the construction of the linear part and the stations for different purposes.
Prepared draft contracts, which will be enclosed in the tender. We do not expect long negotiations, in view of the fact that the proposed contract scheme have been accepted by the market and demonstrated its effectiveness and balance of interests of the parties. And last, but important is that the team of advisors among world leaders in their field.
In General, all this means that the project is progressing according to the planned schedule, in 2019 it is planned to start gas supplies to TAPI.
— What type of support is the construction of TAPI at the state level?
— Initially, it should be noted that the engine of progress of this project is the Turkmenistan. Thanks to the initiative and personal leadership of President of Turkmenistan Gurbanguly Ver smoke Hamidova the project has achieved its present stage of development, namely, over the last few years he became incarnate from ideas into reality. In the near future is expected to start construction works in the territories of Afghanistan and Pakistan.
Undoubtedly, the Governments of the participating countries fully support the TAPI gas pipeline project. It turns out all possible assistance activities of the consortium “TAPI Pipeline Company Limited” on the level of shareholders, which, in turn, are state-owned gas companies, and government departments of the relevant jurisdictions.
The representatives of the governments of Turkmenistan, Afghanistan, Pakistan and India are working very closely and effectively. And this confirms the fact that the TAPI project is extremely important for the development of the regional economy, especially for the industrial sector, large and small businesses. So, for supplies and construction work will involve local contractors. Participating countries will benefit from cheaper, cost-effective and environmentally clean source of energy, and additional revenues from gas transit.
As stressed by President Gurbanguly Berdimuhamedov, in addition to the economic development of the region, solution of vital social issues, the implementation of the TAPI project will contribute to strengthening peace and stability. In this context, consider the project as a participating country and the international community as a whole.
Continuing the theme it is necessary to note one more important and long-term partner of the project is the Asian development Bank. ADB is involved in the project from the outset and continues to fully support TAPI, including through the provision of concessional loans. Thus, the agreement between the Government of Afghanistan and ADB on financing of the Afghan part of equity in “TAPI Pipeline Company Limited”.
— What criteria are selected consultants and contractors of the project?
— First of all, the presence of solid experience in the field of design, construction and operation of pipelines, introduction to the project of global best practices and standards. Special attention is paid to the environmental dimension. The route selection was guided by the principle of minimum impact on the environment. Due to technical difficulties, the TAPI project can be put on a par with other international pipeline projects. In this regard, it should be noted the successful work of our consultants – German company “ILF” and the British “Allen & Overy”.
— How are questions of financing of the project?
State Bank for foreign economic Affairs of Turkmenistan and the Turkmengaz have extensive experience in attracting investment in large international projects and accordingly work with various credit agencies and financial institutions. These include the Asian development Bank and the Islamic development Bank, export credit agencies and sovereign wealth funds of various countries and international commercial banks.
Given the fact that the lion share of the necessary investment takes delivery of goods and equipment long-term production, exportcredit agencies can potentially play an important role in the financing of the project. In addition, the parties participating in the project unanimously reaffirmed their commitment to the project and the obligation to provide equity according to the shares and arrangements.