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Turkmenistan gas pipeline transit fee finalised: Minister

India,Business/Economy, Thu, 26 Apr 2012 IANS

New Delhi, April 26 (IANS) India said Thursday it has almost finalised the transit fee with Afghanistan and Pakistan for import of gas from Turkmenistan through a pipeline that will pass through these two countries.


"A broad understanding among India, Pakistan and Afghanistan has been arrived on transit fee for import of natural gas through Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project," Minister of State for Petroleum and Natural Gas R.P.N. Singh said while replying to a question in the Lok Sabha.


"However, a formal agreement has not been signed yet," he added.


The proposed 1,735-km long pipeline is estimated to cost almost $7.6 billion.


Security concerns and transit fee had been the main hindrance in the progress on the project, as the pipeline will pass through politically instable regions.


On pricing of gas, Singh said India and Turkmenistan have already agreed on the price mechanism.


The contract price of TAPI gas is linked to a formula which contains indices based on fuel basket and other indices which are not as volatile as crude oil. The formula is similar to the ones used in international contracts.


However, Singh said "gas sale and purchase agreement" relating to the TAPI pipeline project, which includes inter alia the pricing of Turkmen gas, has not been signed yet.


Replying to another query, Singh said at present, there are broadly two pricing regimes for gas in the country - gas priced under administrative pricing mechanism (APM) and non-APM.


The price of APM gas is set by the government. As regard non-APM domestic gas, it is produced from New Exploration Policy (NELP) and pre-NELP fields.


The pricing of NELP and pre-NELP gas is governed in terms of the production sharing contract signed between the government and the contractor.


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