Press Information Bureau

Government of India

Ministry of Petroleum & Natural Gas

07-February-2013 13:30 IST

The Union Cabinet today gave its approval for formation of the Special Purpose Vehicle (SPV) for the Turkmenistan-Afghanistan-Pakistan-India(TAPI) Pipeline  Project and to permit GAIL India Ltd. to join the SPV.

The four countries involved in the TAPI Gas pipeline project, signed an Inter-Governmental Agreement along with a Gas Pipeline Framework Agreement(GPFA). To accelerate the project, parties have formed the Minister Level Steering Committee and Technical Working Group (TWO). Suitable provisions for security & safety of the pipeline have been made in the Inter-Governmental Agreement (IGA) and Gas Pipeline Framework Agreement (GPFA).

In the meeting of the 16^th Steering Committee held on 23^rd September, 2012, all parties reaffirmed their commitment and intention to fast track this important regional co-operation project. As a way forward, Turkmenistan suggested the formation of a SPV by the TAPl members. The SPV would take up the Feasibility Study and Design work of the TAPl pipeline to meet the agreed timelines for the project, as well as search for a consortium lead.

Turkmenistan and Pakistan agreed to the formation of TAPl Ltd. considering it to be in consonance with the GPFA. Afghanistan also agreed to the formation of TAPl Ltd. so long as there was consensus amongst the Parties.

TAPl Ltd. is required to have an initial contribution of USD 20 million that is USD 5 million from an identified entity from each of the four participating countries. GAIL, being a Navratna Company, is empowered to make an investment of this level for India.

GAIL has agreed to make an investment upto USD 5 million in the proposed SPV that is TAPI Ltd. An active interest in the project by all the partner countries at this stage would sustain the credibility of the project,  and generate interest in the international market and could eventually pave the way for selection of an appropriate consortium leader in the future.

Background:

Based on an 'in-principle' approval of the Cabinet on 18^th May, 2006, India joined the Turkmenistan-Afghanistan-Pakistan (TAP) Project in April, 2008 and thereafter, the name of the project stood amended to Turkmenistan-Afghanistan-Pakistan-India (TAPl) Gas Pipeline Project.

****

SC/SM

SPV formation for transnational pipeline project enables state-owned company to join and fund feasibility and design Cabinet approval permits formation of TAPI Ltd. as a Special Purpose Vehicle for the TAPI Gas Pipeline Project and authorises GAIL India Ltd. to join and invest in the SPV. TAPI Ltd. will undertake Feasibility Study and Design work, pursue a consortium lead, and rely on contributions from identified entities of the four participating countries, within the governance framework of the Inter Governmental Agreement and Gas Pipeline Framework Agreement.