India, Turkmenistan, Afghanistan and Pakistan formalized the deal on TAPI (each alphabet represent the country’s name) pipeline. With this deal underway Turkmenistan, which has 4 per cent of the world's natural gas reserves will supply natural gas to Pakistan and India.
Turkmengaz (Turkmenistan's state gas company), Pakistan's Inter State Gas Systems and GAIL signed the agreement on Wednesday at the Caspian Sea resort of Avaza, Turkmenistan.
TAPI, a $7.6 billion project that is likely to become operational by 2018 will be 1,735 kms long pipeline that will carry 1 trillion cubic metres of gas for 30 years.
The peace pipeline deal covered commercial terms for gas sales but will need billions of dollars in funding.
The only problem and biggest hurdle it faces is that pipeline has to cross chronically unstable Afghanistan particularly the 735 kms leg through Herat and Kandahar. It faces security problems because NATO is planning to hand control of Afghanistan to its security forces by next year.
GAIL's Chairman B. C. Tirpathi signed the deal in the presence of Jaipal Reddy (Petroleum and Natural Gas Minister).
India's natural gas sector is estimated to grow 19.5% per annum for next five years and LNG re-gasification capacity will increase to 48 million tonnes by 2017 from the current 13.5 million tonne.
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