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Transit Fee for TAPI Gas Pipeline Agreed

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Transit Fee for TAPI Gas Pipeline Agreed

Afghanistan, Pakistan and India have agreed on a transit fee for a multi-billion natural gas pipeline project, a Ministry of Mines official in Kabul said on Tuesday.
The 1735-kilometre pipeline, known as Turkmenistan-Afghanistan-Pakistan-India (TAPI) project, will run from Daulatabad through Herat and Kandahar provinces before entering Pakistan and ending in the Punjab province of India.

Mines ministry spokesman Mohammad Jawad Omar, who did not reveal how much Afghanistan would earn in transit fee, said the agreement was inked in Islamabad the other day. “Under the agreement, I cannot specify the amount.”

Omar added the $7.6 billion project was a huge economic plan and every step toward making it operational was a good omen for the countries involved.
According to information from the Ministry of Mines, Afghanistan will earn $400,000 million in transit fee per year. The project is being funded by the Asian Development Bank (ADB).

Two years ago, the presidents of Afghanistan, Pakistan, Turkmenistan and the mines minister of India signed an agreement on the proposed pipeline.
Omar said a joint meeting of mine ministers from the four partners and a ADB representatives was expected to take place in Ashgabat, the Turkmen capital, on May 25. He said all aspects of the pipeline would be finalized.

The ministry previously said practical work on the project would be initiated in 2014. Two months ago, Mines Minister Wahidullah Shahrani said the pipeline would start taking gas from Turkmenistan via Afghanistan to Pakistan and then India in 2016.

For the next 30 years after 2016, the pipeline will take 34 billion cubic meters of gas annually. He said Afghanistan would have the right to use 600 million cubic meters of gas each year during initial years and 5 billion cubic meters later.

Turkmenistan has agreed to supply 90 of gas to the three consumers. India and Pakistan will receive about 38 mmscmd of gas each while the rest will be consumed by Afghanistan.
Pakistan is likely to get around 20 percent more gas when the project becomes operational. Pakistan and India reportedly agreed in January on the idea of a uniform transit fee for the pipeline.

Source: Daily Outlook



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