GAIL, TurkmenGaz sign TAPI gas sale-purchase agreement

GAIL and TurkmenGaz have signed a natural gas sale and purchase agreement for Turkmen gas shipped via the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline. Shri S. Jaipal Reddy, India’s Minister of Petroleum and Natural Gas, described the Indian market as “eagerly awaiting the commissioning of the TAPI gas pipeline,” citing projections that the gas sector in India will expand at a compound annual rate of 19.5% in the next 5 years.

Reddy said India’s consumption of gas would increase from the current 166.2 MMcfd to 473 MMcfd in 2017, prompting the country to focus on both building its LNG infrastructure and expanding its gas pipelines. India’s LNG regasification capacity will rise to 48 million tonnes/year by 2017 from 13.5 million tonnes/year now, according to Reddy, who also described the country’s current gas pipeline network at 13,000 km long with a capacity of 334 MMcfd but projected to increase to 31,757 km by 2017 with a capacity of 876 MMcfd.

In addition to TAPI and any other opportunities to import gas via pipeline, Reddy said India sought to diversify its sources of LNG supply, not only through purchase agreements but by equity participation in future liquefaction projects and farm-in production agreements.

At roughly 1,680 km and built with 56-in. OD pipe, TAPI would transport gas from Turkmenistan's Daulatabad field to Fazilka, Punjab, India, at a capacity of 27 billion cu m/year, with part of this total drawn off in Afghanistan and Pakistan. With construction unlikely to begin before 2013, the earliest in-service date is 2017.

Contact Christopher E. Smith at chriss@ogjonline.com.

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