Catalog

Turkmenistan-Afghanistan-Pakistan Natural Gas Pipeline Project
June 2003

The Turkmenistan-Afghanistan-Pakistan Natural Gas Pipeline Project (the Project) is a gas pipeline of about 1,600 kilometers that will transport up to 30 billion cubic meters of natural gas annually from the Dauletabad fields in South East Turkmenistan to consumers in Afghanistan, Pakistan and possibly India. The final cost of the Project is estimated at between $2.0 to $2.5 billion. The Project will take about three years to be implemented after all key decisions are taken by the cooperating countries.

The Heads of State of Afghanistan, Pakistan and Turkmenistan met in Islamabad on 29-30 May 2002 to announce the formation of a coalition for implementing this Project. They have established a Steering Committee of Ministers of oil and gas from the three countries for necessary follow up and supervision. ADB was requested by the Steering Committee, during its first meeting held in 9-10 July at Ashgabat, to play the role of a development partner and help with the feasibility study for the Project. ADB has committed to provide resources to undertake the full feasibility study and complete such a study by October 2003.

The second meeting of the Steering Committee was held on 16 September 2002 in Kabul. At that meeting, the terms of reference (TOR) for the feasibility study was presented by ADB to the Steering Committee along with a draft of the Framework Agreement amongst participating countries. The Steering Committee approved the TOR and agreed to consider the Framework Agreement at its next meeting in Ashgabat scheduled for 17-18 October 2002.

At the third Steering Committee meeting held in Ashgabat, the Committee initialed the draft of the Framework Agreement (subject to confirmation by their respective Governments) for signing by the Heads of State at their next meeting. The Committee also conveyed its "no-objection" to accepting a Technical Assistance from ADB for conducting the feasibility study on the pipeline. The Framework Agreement was subsequently signed by the Heads of State in Ashgabat on 27 December 2002.

The Fourth Meeting of the Steering Committee was held on 22 February 2003 at Islamabad, wherein a decision was taken to invite India to join the group. Decisions were also taken on the project structure, on the basis for pre-qualifying private sector companies interested in leadership of the pipeline consortium, and on the risks and mitigation measures to be adopted to improve the Project's risk profile.

At its Fifth Meeting held in Manila on 8-9 April 2003, the Steering Committee approved the report on the market study conducted for sale of Turkmen gas in Pakistan and Northern India. The three Ministers signed a joint letter inviting India to join in the Project. The Committee also approved the pre-qualification documents and authorized ADB to commence the pre-qualification process. M/s Penspen of UK, who have been appointed as the consultants for conducting the feasibilities under the ADB-funded TA, were introduced to the Steering Committee.

The sixth meeting of the Steering Committee will be held in Ashgabat during 19-20 June 2003.

The Project has significant potential for enhancing stability and improving living standards in South and Central Asia. If successful, it will be a pioneering effort in linking the energy deficit economies of South Asia to the hydrocarbon rich Central Asian countries. This has very long term and widespread positive implications for these two regions. The Project reflects the essence of ADB's approach towards Regional Cooperation, which is a primary mandate of the organization. ADB's role is that of an honest broker and an active development partner that helps to mobilize necessary technical and financial resources for the Project.

ADB is fully cognizant of the risks attached to this Project, and these are considerable. These risks pertain to the techno-economic viability of the Project, security aspects and the investment climate in the region. However, these risks can be seen as challenges that have to be faced to make the Project successful. We are confident that with necessary political will on part of participating countries, and based on excellent relationship between ADB and each of the four countries, these challenges will be addressed.