Turkmengas, Afghan Gas Enterprise, Inter State Gas Systems (Private) Ltd and GAIL will own equal shares of the company, TAPI Pipeline Company Limited (TPCL). The company has been incorporated as a Special Purpose Vehicle (SPV – also referred to as a “÷bankruptcy-remote entity’) in the Isle of Man, a British Crown dependency, located in the Irish Sea. This SPV would be responsible for finance, design, construction, operation and maintenance of the pipeline.
Appointed as transaction advisor for the TAPI gas pipeline project in November 2013, the Asia Development Bank (ADB) advised on the establishment of the TAPI pipeline company as an integral part of the larger goal of identifying and selecting a consortium leader to spearhead the construction and operation of the pipeline. When selected, the consortium leader will be expected to take a substantial stake in the company.
The TAPI pipeline will export up to 33 Bcm/a of natural gas from Turkmenistan to Afghanistan, Pakistan, and India over 30 years. Turkmenistan has the world’s fourth-largest proven gas reserves, and the pipeline will allow the landlocked country to diversify its gas export markets to the southeast. Turkmen gas in turn will provide a key new source of fuel for Afghanistan, Pakistan, and India.
India and Pakistan are expected to receive approximately 38 MMcm/d of gas from the pipeline feed, whereas Afghanistan will receive 14 MMcm/d. Currently, Afghanistan has indicated that it will be taking volumes of around 1.5-4 MMcm/d of gas. Volumes not taken by Afghanistan can be equally shared between India and Pakistan.
In October this year, oil and gas engineering firm Penspen was awarded a contract by the ADB to carry out a technical feasibility study on the project. It is expected that the pipeline will be completed by 2017.