Islamic Development Bank, Saudi fund, Japan interested in financing TAPI gas pipeline
ASHGABAT. May 23 (Interfax) - The Islamic Development Bank (IDB), the Saudi Fund for Development and the Japanese government have expressed interest in financing construction of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline, which will cost an estimated $7 billion-$10 billion, the head of the TAPI Pipeline Company consortium Muhammetmyrat Amanov said.
The IDB is ready to finance construction of the pipeline in Turkmenistan as well as in Afghanistan and Pakistan, Amanov said at the Turkmenistan Gas Congress.
The final appraisal of the project costs is currently underway.
During a roundtable to discuss financing opportunities and raising investment for construction of TAPI, three main areas for participation by foreign partners in the project were examined: trade, particularly supply of pipe and gas equipment; financing through provision of loans; and investment in the TAPI project and in development of the big Galkynysh gas field in Turkmenistan.
The proposals draw a great deal of interest from a number of foreign investors, major companies, banks and other financial organizations, as evidenced by the signing of a protocol by IDB and state-owned Turkmengaz on the results of the TAPI project appraisal commission and a memorandum of understanding between the Turkmen government and the IDB on stepped up cooperation on participation in financing promising development projects, Amanov said.
Shareholders in TAPI Pipeline Company, which will build and operate the pipeline, earlier signed an investment agreement with an initial budget totaling more than $200 million. It provides for financing the next phase of TAPI implementation, including detailed surveying work on the route of the future gas pipeline and study of the environmental and social impact. The pipeline, which will have capacity to ship 33 billion cubic meters a year, is expected to take three years to build.
Turkmengaz and Turkmenneftegazstroy are leading construction of the 214-kilometer pipeline segment in Turkmenistan, from the Galkynysh field to the Afghan border.
TAPI will stretch a total of 1,814 km, including 774 km in Afghanistan and 826 km through Pakistan to the Indian border. TAPI is scheduled to enter service at the end of 2019.
The contractors for construction of the pipeline segments in Afghanistan and Pakistan will be chosen in international tenders.