Turkmenistan-Afghanistan-Pakistan-India gas transit fee top agenda of India, Pakistan talks later this month

New Delhi: India and Pakistan will commence crucial negotiations on the transit fee Islamabad would charge for $7.6-billion natural gas pipeline from Turkmenistan, when oil ministers of both countries meet in New Delhi this month.

The high level ministerial delegation from Pakistan is scheduled to visit India on January 25, hoping to agree on transit fee, one of major hurdles in executing Turkmenistan- Afghanistan- Pakistan- India (TAPI) gas pipeline project.

India wants to settle transit fee before negotiating price of gas, Economic Times quoted Indian officials as saying. “This would give us fair idea about landed cost of Turkmen gas. India’s participation in TAPI project will depend on landed cost of gas,” one official said.

Another delegation of Pakistani officials is expected to arrive India this month to open up fuel trade between two countries. “India has surplus refining capacity and Pakistan depends on import of petrol and diesel. We can be natural partners,” another official said. Earlier, this delegation was expected next week, but it was postponed and new dates are not yet finalized.

India indicated willingness to export petrol and diesel to Pakistan last year. Officials say export of petroleum products and transnational gas pipeline would not only meet growing fuel demands of two energy-hungry countries but also help in diffusing tension across the border.

“Once, transit fee issue is resolved, we will be closer to signing GSPA,” one official said. The four countries executing TAPI project had decided in April, 2011 that they would finalize gas sales purchase agreement (GSPA) by July. India, which is at end of 1,680 kilometre long pipeline, is worried about landed cost of gas and wants to invest in project only if Turkmen gas is cheaper than spot price of liquefied natural gas (LNG) at its Punjab border.

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