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TAPI: GSPA Signed Between GAIL and Turkmengaz

Thursday 24 May 2012

NEW DELHI (Government of India) – In a significant development towards realisation of the trans-national gas pipeline project-Turkmenistan-Afghanistan-Pakistan-India (TAPI) Gas Pipeline project, the Gas Sale & Purchase Agreement was signed between GAIL and TukmenGaz at Ashgabat yesterday. The GSPA was signed by CMD GAIL Mr BC Tripathi and Chairman TurkmenGaz Mr Baymrat Hojamuhamedov in the presence of Shri S. Jaipal Reddy Minister of Petroleum & Natural gas. Shri S. Jaipal Reddy spoke today at the 3rd Turkmenistan Gas Congress at Awaza, Turkmentistan.

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Sudini Jaipal Reddy
He is a member of the 15th Lok Sabha of India. He represents the Chevella constituency of Andhra Pradesh and is a member of the Indian National Congress. He is currently the Cabinet Minister of Petroleum and Natural Gas of India. He was the Cabinet Minister of Urban development of India, who headed the group of ministers(GoM), appointed by the PM Dr Manmohan Singh to supervise XIX Commonwealth Games (CWG) in Delhi.

The Minister has held several meetings including with the Deputy Chairmen, Cabinet Minister of Turkmenistan Mr. B.Hojamohamedov; and his counterparts from Afghanistan, Pakistan and Turkmenistan. He also attended the 15th Steering Committee of Ministers of the TAPI project. During his visit the Minister addressed the Gas Conference at Azawa Turkmenistan and congratulated his counterparts from Turkmenistan, Afghanistan and Pakistan for showing great political courage and moving forward on the TAPI Gas Pipeline project.

Terming the moment historical, Shri Reddy said:

I have no doubt that decades later, when the history of this period is written, the TAPI project will stand out as a watershed development ushering in peace, prosperity and stability in this region. Let us seize this moment in history and make the TAPI Gas Pipeline a reality at the earliest.

Following is the text of his speech:

Your Excellency, Mr. Baymrat Hojamuhamedov, Deputy Chairman, Cabinet of Ministers, Turkmenistan,
Your Excellency, Mr. B. Nedirov, Minister of Oil & Gas Industry and Mineral Resources, Turkmenistan,
Your Excellency, Mr. Mr. Asim Hussain, Federal Minister of Petroleum & Natural Resources, Islamic Republic of Pakistan
Your Excellency, Mr. Wahidullah Shahrani, Minister of Mines, Islamic Republic of Afghanistan,
Sahatmyrad Mammevov , Chairman, National Oil Company TurkmenGaz,
Excellencies, Captains of the world’s leading oil & gas companies, Ladies and Gentlemen

I am delighted to be attending the 3rd Turkmenistan Gas Congress and Exhibition in this beautiful resort of Awaza. Awaza owes its rapid development to the vision and commitment of H.E. President Gurbanguly Berdimuhamedov whose inspiring leadership we have witnessed during the TAPI Summit in December 2010 and thereafter, in steadfastly supporting and guiding the TAPI Project.

The presence of a strong Indian delegation in Awaza testifies to the importance we attach to Turkmenistan as a friendly country and as a potential supplier of our energy needs in the coming days. Our participation also underlines our country’s appreciation of the growing role that natural gas will play in India’s as well as the world’s energy basket in the years ahead. Most importantly, the presence of the strong Indian delegation is a re-affirmation of our faith in the TAPI Gas Pipeline Project.

Excellencies, Ladies & Gentlemen, you are perhaps aware that the Gas Sales & Purchase Agreement (GSPA) for TAPI Gas Pipeline Project is being signed today. For us, the signing of the GSPA is no ordinary event. While the GSPA could be construed by some as a mere contractual document, for us this particular GSPA is a triumph of multilateralism, regional cooperation and economic integration. The GSPA is a testament to the vision and farsightedness of the leaderships of the participating countries. I would like to congratulate the Petroleum Ministers of Turkmenistan, Afghanistan and Pakistan for their vision, patience and tact for making a project of this magnitude happen in a region undergoing severe socio-political stress.

Without a doubt, the economic benefits of the TAPI Gas Pipeline will be immense for our energy-starved economies. The flow of natural gas will bring in its wake industrial and economic development in our countries. This will not only enhance prosperity through employment generation, but more importantly, also provide socio-political stabilization in this region. In our inter-connected and globalizing world, economics’ does shape politics. It is our belief that the TAPI Gas Pipeline will transform the politics of this region. Hopefully, the spin-off benefits of this pipeline will encourage us to emphasize trade and investment issues over contentious political issues and enable us to build trust and confidence among ourselves as neighbours and partners in progress.

The Indian market is eagerly awaiting the commissioning of the TAPI Gas Pipeline. The natural gas sector in India is projected to grow at a compound annual growth rate of 19.5% in the five years ahead. Our consumption of natural gas is expected to grow from the current 166.2 MMSCMD to 473 MMSCMD in 2017. Hence, we are focusing on building LNG infrastructure on the one hand and expansion of gas pipelines across the country, on the other. India’s LNG re-gasification capacity is poised to go up from 13.5 million tonnes to 48 million tonnes by 2017. Our current gas pipeline network is around 13,000 km long with a capacity of 334 MMSCMD. It is projected to grow by more than double to 31,757 km by 2017 with a capacity of 876 MMSCMD.

Once again, I congratulate my counterparts from Turkmenistan, Afghanistan and Pakistan for showing great political courage and moving forward on the TAPI Gas Pipeline project. I have no doubt that decades later, when the history of this period is written, the TAPI project will stand out as a watershed development ushering in peace, prosperity and stability in this region. Let us seize this moment in history and make the TAPI Gas Pipeline a reality at the earliest.

Excellencies, Ladies & Gentlemen, since this is a Gas Conference & Exhibition, I would like to take this opportunity to apprise the distinguished participants of the significant steps being taken by India in the natural gas sector. Presently, natural gas accounts for around 10% of India’s primary energy basket as against the world average of 24%. As natural gas is a more versatile fuel besides being environmentally benign, the Government of India has embarked on a path of increasing the use of this fuel in the country’s energy basket.

We have taken several steps to increase domestic production of oil & gas. The New Exploration Licensing Policy (NELP) launched in the year 1997-98 has seen investments of 14.2 billion dollars and has resulted in 87 oil & gas discoveries, with 3 blocks on production. NELP offers all the necessary ingredients of a favourable investment climate: macro-economic and fiscal stability, transparency and the rule of law, contract stability, minimal policy-induced uncertainties and ensuring a stable legal and regulatory framework. 

The Mangala fields in Rajasthan have shattered the mis-perception that India was devoid of hydrocarbon potential. These fields, which commenced production in August 2009, are the biggest discovery since “Bombay High” in the 1970s, and at peak production will contribute about 25% of the country’s domestic oil production. British Petroleum’s recent decision to buy a 30% stake in the KGD-6 gas field for 7.2 billion dollars, one of the largest foreign direct investments in the country, is a concrete example of the tremendous opportunities offered by India’s hydrocarbon sector. I invite the captains of the oil and gas industry present here, to participate in the exploration & production of hydrocarbons in India.

We are seriously pursuing the development of Shale gas in the country. We have undertaken the mapping of India’s Shale gas resources and are working to put in place a regulatory regime for licence rounds in Shale gas, by December 2013. We are also harnessing Coal Bed Methane: so far, we have held 4 license rounds, and commercial production has commenced at Raniganj in West Bengal. We look forward to working with international companies having the requisite experience and expertise in this field.

We are keen to diversify our source of LNG supplies and are looking to LNG exporters across the globe for tying up our growing requirement of LNG imports. We are interested in not only buying additional quantities of LNG, but also seek to have equity participation in existing and upcoming LNG liquefaction projects globally. We are also keen to explore farm-in opportunities in producing oil & gas blocks whenever they may be available.

I thank the Government of Turkmenistan for the warm hospitality extended to us and for the excellent arrangements made for hosting this Conference. We reaffirm our commitment to the early operationalization of the TAPI Gas Pipeline Project. I am sure the deliberations of this Conference will bring greater clarity to the issues before the global gas industry besides, of course, facilitate larger investments in the gas sector, thereby benefiting us all.”

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