TAPI Transit Fee Top Agenda for India, Pak Talks Later This Month
India and Pakistan will commence crucial negotiations on the transit fee Islamabad would charge for the $7.6-billion natural gas pipeline from Turkmenistan, when oil ministers of both countries meet in New Delhi this month.
The high-level ministerial delegation from Pakistan is scheduled to visit India on January 25, hoping to agree on transit fee, one of the major hurdles in executing the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline.
India wants to settle the issue of the transit fee before negotiating the price of gas, government officials familiar with the development said.
"This would give us a fair idea about the landed cost of Turkmen gas. India's participation in the TAPI project will depend on the landed cost of gas," one official said on condition of anonymity. Another delegation of Pakistani officials is expected to arrive India this month to open up fuel trade between the two countries, officials said.
"India has surplus refining capacity and Pakistan depends on import of petrol and diesel. We can be natural partners," another official said. Earlier, this delegation was expected next week, but the meeting is postponed and new dates are not yet finalized, officials said.
ET first wrote about India's willingness to export petrol and diesel to Pakistan on April 25. Officials say that export of petroleum products and the transnational pipeline would not only meet growing fuel demands of the two energy-hungry countries but also help in diffusing tension across the border.
"Once, the transit fee issue is resolved, we will be closer to signing GSPA," one official said. The four countries executing the TAPI project had decided in April last year that they would finalise the gas sales purchase agreement (GSPA) by July.
But India, which is at the end of the 1,680 kilometrelong pipeline, is worried about landed cost of gas and wants to invest in the project only if the Turkmen gas is cheaper than spot price of liquefied natural gas (LNG) at the Punjab border.
Source: Economic Times