Draft agreement reached on TAPI pipeline

ISLAMABAD, Pakistan, Oct. 28 (UPI) -- Pakistan and Turkmenistan reached a draft agreement on gas from a planned $7.6 billion pipeline, though Islamabad said it was still keen on working with Iran.

"We have struck the deal," said Pakistani Petroleum Minister Asim Hussain of the Turkmenistan-Afghanistan-Pakistan-India natural gas project, Pakistan's Dawn newspaper reported.

The deal would increase plans by Ashgabat to deliver about 1.1 trillion cubic feet of gas each year through the pipeline by about 2 billion cf when it goes into service in the next few years. Both sides agreed to a price that was 69 percent of crude oil parity.

Islamabad said the service date for the pipeline depends on the security situation in Afghanistan.

Sources told Dawn that India was close to finalizing a natural gas price with Turkmenistan for the project.

Analysts had suggested the TAPI deal would scupper Iran's plans to build a pipeline to deliver natural gas to Pakistan from the giant South Pars field in the Persian Gulf.

Hussain said that was unlikely, however, because both sides already had an electricity agreement.

"How can we purchase electricity from Iran if we do not honor an agreement for gas import?" he asked.

A final agreement on TAPI is expected Nov. 15.