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TAPI: Pakistan Seeks Fifty Cents per MMBTU Transit Fee

Friday 30 March 2012

ISLAMABAD (The News International) – Islamabad has sought 50 cents per MMBTU as transit fee from New Delhi while Kabul has sought 41-45 cents per MMBTU from Islamabad for the gas to be imported from Turkmenistan under $7.6 billion TAPI gas line project during recent talks held in India, secretary ministry of petroleum and natural resources told The News.

“Afghanistan has declined to have intake of gas from Turkmenistan under TAPI project arguing it has no infrastructure and gas network to absorb the gas, so it cannot afford to have its share of gas. Kabul is only interested in transit fee but Pakistan and India are persuading Kabul to have its share of gas,” he disclosed while talking about his recent discussion in New Delhi on the transit fee on gas under TAPI project.

If Kabul sticks to its stance then its share will be equally divided between Pakistan and India. He said Pakistan has also asked India for the transit fee equal to the transit fee that Afghanistan will charge from India but India is not in a mood to entertain this proposal saying the length of pipeline running through Afghanistan is much more than that of Pakistan and it will passes through difficult terrain.

India will have to pay two transit fees, one to Afghanistan and other to Pakistan while Pakistan will have to pay transit fee only to Afghanistan Pakistan hopes to get approved its proposal in the next round of talks on transit fee to be held in Kabul on April 19.

Natural gas from Turkmenistan would be delivered to India at an estimated price of about $10 per unit, including $3 as transportation charges and transit fee. Gas would be purchased at about $7 per unit at Turkmenistan but its cost would rise as it transits across two countries before reaching the Punjab border. It would be cheaper than some long-term LNG contracts, government and industry officials said. Gas-starved India pays a spot price of about $16 a unit for liquefied natural gas. Petronet LNG has recently contracted LNG import from Australia’s Gorgon project at $15.8 per unit while Gail’s 20-year contract with US’ Sabine Pass works out to be around $10 per unit.

Under the proposed project, the 1,640 km long TAPI gas pipeline will bring 90 million m³ of natural gas per day (mcmd) from Turkmenistan’s gas fields to Multan in central Pakistan and end in the northwest Indian town of Fazilka. Out of this, Pakistan will get 38.7 million m³ of gas per day, India 38.7 mcmd and Afghanistan 14.2 mcmd. “Now under the new development, Afghanistan has surrendered its share that will now be equally divided between Pakistan and India.

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