Renegotiating TAPI gas price

Renegotiating TAPI gas price

An intergovernmental agreement had been made for the supply of gas through pipeline by Turkmenistan to Afghanistan, Pakistan and India. It now appears that like the gas import agreements made by the previous governments with Iran and Qatar, the TAPI agreement has also transparency issues, particularly price per mmbtu. India had walked out of the tripartite agreement for the import of gas from Iran via pipelining through Pakistan, citing the reason of inflated price. But previous PPP government did not do so for the same reason and made formal bilateral agreement in 2011 which seems difficult to be implemented. In August, Iran hinted to sue Pakistan in the International Court of Arbitration for imposing heavy penalty if the bilateral agreement is breached.

The present government is now in the process of renegotiating gas price with TAPI Project Company before starting the construction work of the pipeline in the country from Chaman to Multan. The project envisages construction of 56 inch diameter pipeline of 1650 meter length from Turkmenistan through Afghanistan to the Indian border. As per TAPI agreement, Pakistan and India will get 1,325 bcfd gas per day and Afghanistan 0.5 bcfd. The present government has rightly decided to resolve the tariff issue in the larger national interest keeping in view the fall outs of gas import agreements. The country needs gas for the second phase of industrialisation under the CPEC frame work but at affordable price.

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