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Delhi invited to the "pipe"
India invited to join Central Asia Gas pipeline project

The energy ministers of Afghanistan, Pakistan and Turkmenistan signed a joint letter Wednesday inviting India to participate in the Turkmenistan-Afghanistan-Pakistan Natural Gas Pipeline Project both as an investor and buyer of natural gas.

The project, estimated to cost $2 billion to $2.5 billion, involves the construction of a pipeline spanning at least 1,600 kilometers (992 miles) that will transport up to 30 billion cubic meters of natural gas a year from the Dauletabad fields in southern Turkmenistan to Pakistan, Afghanistan and possibly India. Construction of the pipeline is scheduled to begin sometime in 2004 and is expected to take three years to complete.

Oil and gas ministers from Pakistan, Afghanistan and Turkmenistan, who were attending the project steering committee meeting at the headquarters of the Asian Development Bank in Manila, invited India to participate both as an investor and as a major purchaser of gas.

The letter also requests the Indian government to invite the ADB to India to make a presentation on the project and other issues, including the approach toward mitigating risks and security concerns related to the project.

The ADB, a primary partner in developing the project, providing technical assistance, will submit a draft of a model gas transportation and gas sale and purchase agreement within the next 10 days to participants of the project.

Pakistan's Minister for Petroleum and Natural Resources, Nouraiz Hakoor Khan, said even without India's participation, it is a viable project. He noted that Pakistan intends to shift its energy plan to natural gas from oil.

He said he is optimistic that India will participate in the project because it is "short of gas." India's participation would be good for the seller in the project (Turkmenistan) and its participants, he added.

The steering committee agreed to review the host country agreement presented by the ADB and finalize the document at the next steering committee meeting scheduled in Turkmenistan in the first week of June.

The committee also agreed to the methodology and timetable presented by the consulting company, Penspen of the United Kingdom, which carried out the techno-economic feasibility study for the project. It agreed to decide on the pipeline route within two weeks of the submission of the inception report to ensure a timely start and completion of phases 2 and 3 of the feasibility study.

The project has a significant potential to improve stability and raise living standards in south and central Asia, through providing investment and employment, improving infrastructure and building regional cooperation.

The feasibility study is expected to be completed in September, while the identification of private sector sponsors is scheduled to be announced in December 2003.

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By Cris Larano, Dow Jones Newswires

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