Pakistan agrees to include India in gas pipeline project

Monday, 06 January 2003, 20:30 IST
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ISLAMABAD: Pakistan has agreed to include Indians in a feasibility survey for the Turkmenistan-Afghanistan-Pakistan gas pipeline, the second phase of which may extend to India, says a petroleum ministry official here. "We have agreed to include Indians in the feasibility study but they will not be allowed to go to prohibited and sensitive areas," the official told IANS. There is a proposal to extend the second phase of the pipeline to India. Experts feel India will benefit hugely from the project because Turkmenistan has large reserves of natural gas that can cater to the needs of the region for 100 years. Leaders from Pakistan, Turkmenistan and Afghanistan last month signed an agreement for the construction of the pipeline that will run from the Daultana gas fields in Turkmenistan to Pakistan's central city of Multan through Afghanistan. According to the official, if India joins the project and the pipeline is extended to Indian cities, Pakistan will get $500 million in royalty per year. Moreover, Afghanistan is expected to earn $300 million per annum in the shape of a transit fee and see the generation of around 12,000 jobs, said the official. Under the terms of the framework agreement for the Trans-Afghanistan Pipeline Project, Pakistan can only levy tax on the gas used by consumers in the country. The official said that during a meeting of officials of the Asian Development Bank (ADB), Pakistan and Turkmenistan in Islamabad last month, Pakistan had asked that it be allowed to levy tax on the gas carried through the pipeline. On the insistence of Turkmen representatives, however, Pakistan agreed to levy tax only on the gas used by consumers in this country. The pipeline will have a carrying capacity of two billion cubic feet per year. Similarly, it was agreed that none of the three stakeholders would impose taxes on the import of equipment and machinery to be used for the project, he said. Regarding the tax levied on companies involved with the pipeline project, the three countries have agreed that they will impose taxes unilaterally. Another source said Ukrainian companies Zangas and Netgas and Chinese firm China Petroleum and Development Corporation may join the race for entering the consortium after the finalisation of the feasibility study. The Caterpillar Company of U.S. and Itoucho of Japan have shown interest in joining the project.
Source: IANS