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India to ensure safe gas transit from TAPI; to pay $13 a unit

Last Updated: Wednesday, June 27, 2012 - 00:39

New Delhi: India will pay USD 13 per unit for buying natural gas through the much-celebrated TAPI gas pipeline and will take indirect responsibility for safe transit of the fuel through high security risk areas in Afghanistan and Pakistan.

India on May 23 signed agreement to buy natural gas from Turkmenistan at a rate equivalent to 55 percent of crude oil price which, at USD 100 a barrel, translates into USD 9.17 per million British thermal unit, sources privy to the development said.

After adding transit fee and transportation charges, the gas through Turkmenistan-Afghanistan-Pakistan-India (TAPI) line would cost USD 12.99 per mmBtu at Indian border, three times the price paid to ONGC and Reliance Industries for producing natural gas from domestic fields, they said.

The rate agreed to flies in the face of oil ministry which has been stonewalling any increase in price to be paid to domestic producers arguing that a higher gas price would lead to an increase in power tariff and cost of fertiliser, thereby entailing higher government subsidy outgo, they added.

Besides the higher price, India has also in the Gas Sales and Purchase Agreement (GSPA) signed in Caspian Sea resort of Avaza, Turkmenistan agreed to take delivery of natural gas at Turkmen-Aghan border.

State-run gas utility GAIL India, which signed the GSPA, will then entrust the delivery of the gas to a consortium which will operate the TAPI pipeline, they said, adding that GAIL will be a prominent member of the consortium building and operating the 1,680-km line.

Sources said GAIL will pay Turkmengaz, the national oil company of Turkmenistan, on delivery of gas at Turkmen-Afghan border. Thereafter, the consortium which will have GAIL as partner, will take responsibility for transit of the gas through Afghanistan -- one of the top high security risk countries in the world, and terrorism hotbed Pakistan.


First Published: Wednesday, June 27, 2012 - 00:39
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