New Delhi: India's largest natural gas transmission and marketing company GAIL India Ltd has signed a Gas Sales & Purchase Agreement (GSPA) with Turkmenistan for the Turkmenistan-Afghanistan-Pakistan- India (TAPI) natural gas pipeline, to be built at an investment of approximately $7.6 billion.
"The 1680 km, 56 inch diameter pipeline will originate at South Yolotan-Osman in Turkmenistan and will traverse 145 km in Turkmenistan, 735 km in Afghanistan and 800 km in Pakistan before entering India at Fazilka in Punjab," GAIL India said in a statement.
The Indian Cabinet had given its nod for signing the agreement last week.
The gas pipeline will carry 90 million standard cubic meters per day (mmscmd) of gas, of which 14 mmscmd would be consumed by Afghanistan, while India and Pakistan will get 38 mmscmd each.
The deal will help energy-starved India offset the fall in natural gas production amid high demand from power and fertilizer companies, which are facing crunch due to rapid decline in gas output at the Krishna-Godavari basin and dwindling coal supplies.
TAPI project, expected to be operational by 2018, will carry 1 trillion cubic metres of gas for a period of 30 years, the statement added.
The agreement was signed by GAIL Chairman B C Tirpathi and the Chairman of Turkmengaz, Turkmenistan's national oil company, Sakhatmurad Mamedov in the presence of India's Petroleum and Natural Gas Minister Jaipal Reddy on May 23, 2012.
"The implementation of this project will give a powerful impetus to the social and economic development of all the participant countries," Turkmen Deputy Prime Minister Baimurad Hojamukhamedov said before the signing the pact in Turkmenistan.
India's natural gas sector is projected to rise at a compounded annual growth rate of 19.5% over the next five years and the consumption is expected to rise from the current 166.2 mmscmd to 473 mmscmd in 2017, Reddy said.
India is the Asia's third largest oil consumer and imports 80% of its oil needs, and a sharp decline in domestic gas output has forced it to buy costly liquefied natural gas (LNG).
The idea of the TAPI pipeline project, backed by multilateral funding agency Asian Development Bank, was first mooted in mid 1990s. Talks on the projects started in 2002 and the Indian Cabinet approved India's participation on May 18, 2006.
In 2010, the project received the Cabinet approval for signing of the Inter-Governmental Agreement and Gas Pipeline Framework Agreement.
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