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Decision on TAPI gas price in February

India and Turkmenistan will negotiate a price for natural gas supply from central Asia through the proposed $7.6-billion transnational pipeline in February.

, ET Bureau|
Dec 15, 2010, 04.23 AM IST
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NEW DELHI: India and Turkmenistan will negotiate a price for natural gas supply from central Asia through the proposed $7.6-billion transnational pipeline in February during oil minister Bayramgeldi Nedirov's New Delhi visit, two officials with direct knowledge of the matter said.

Officials estimate that the landed cost of gas piped from Turkmenistan via Afghanistan and Pakistan would be about $10 per unit in Punjab, which compares with $7-8 paid by consumers in the region for gas brought from Reliance's KG field and up to $12 per unit some buyers pay for imported liquefied natural gas (LNG). The price of domestic gas is expected to rise by the time the transnational pipeline is built after five years.

The two countries aim to finalise the price of gas and sign a gas sale-purchase agreement (GSPA) in the next six to seven months, one official said. "The oil minister of Turkmenistan is expected in February," the official said requesting anonymity. Officials said Turkmenistan supplies gas to China at $7.5 per unit exclusive of transportation charges and the rate seems reasonable for consumers in the northern India , suffering from acute power shortage.

"Even with additional transportation charges, the landed cost of the gas will be affordable for consumers in 2015," the official said. India expects that the first gas from Turkmenistan will reach consumers across Indo-Pak border by 2015.

Oil minister Murli Deora said this week that Turkmenistan should provide gas at competitive rates. Other gas-consuming countries along the 1,680 km pipeline-—Afghanistan and Pakistan—will also negotiate the gas price with Turkmenistan separately.

ET wrote on December 6 that Turkmenistan wants to sign separate commercial terms with the three gas-consuming nations. "The entire process of finalising gas prices and signing of separate GSPAs is expected to take 6-7 months," the official said.

Turkmenistan has agreed to supply 90 million standard cubic meters per day (mmscmd) gas to the three consumers. India is expected to get about 38 mmscmd gas, the same as Pakistan. The rest of the gas will go to Afghanistan. India on Saturday inked agreements for construction of the $7.6-billion transnational natural gas pipeline, popularly known as TAPI pipeline based on initials of the four partners.

Mr Deora said one of the major concerns was security of the pipeline which would cross volatile regions. "The risk must be shared by all partners," he said.

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