The Asian Development Bank (ADB) has announced the launch of a company to build, own and operate a 1,800km natural gas pipeline, transporting gas across Turkmenistan, Afghanistan, Pakistan and India (Tapi).
Appointed as transaction advisor for the Tapi pipeline in November 2013, the ADB advised the state-owned gas companies of the four countries in establishing the company.
Turkmengas, Afghan Gas Enterprise, Inter State Gas Systems, and Gail (India) will own equal shares of the company, which forms an important part of the eventual goal of identifying a consortium of commercial lenders to finance the pipeline and selecting a leader to spearhead its construction. According to a statement by the ADB, the financial consortium leader will likely take a substantial shareholding of the company upon selection.
Establishment of the company is a key milestone in the development of the pipeline.
“Establishment of the company is a key milestone in the development of the pipeline,” says the director of ADB’s central and west Asia department, Klaus Gerhaeusser. “It is a tangible sign of cooperation between the parties that presages the enhanced energy security, business prospects and overall peace and stability in the region the pipeline promises.”
Once built, the pipeline will reportedly export up to 33 billion cubic metres of natural gas a year from Turkmenistan to Afghanistan, Pakistan and India over a 30-year period. It will allow Turkmenistan, which has the world’s fourth-largest proven gas reserves, to diversify its gas exports.