India, Pakistan to settle transit fee on Turkmenian gas (Lead)

January 25th, 2012 - 7:59 pm ICT by IANS  

New Delhi, Jan 25 (IANS) India and Pakistan Wednesday moved closer to a final decision on the fee to be paid for transporting natural gas from Turkmenistan via a pipeline that will pass through Afghanistan.

The two countries also agreed on a joint strategy to develop gas fields in the Central Asian republic.

The decisions were taken at a meeting between India’s Petroleum and Natural Gas Minister S. Jaipal Reddy and his Pakistani counterpart Asim Hussain here Wednesday.

“Pakistan agreed in-principle that whatever transit fee formula is eventually settled between India and Afghanistan would also be acceptable to it and is subject to the approval of the competent authorities,” the oil ministry said in a statement after the meeting.

“India has been talking to Afghanistan on the transit fee. We are close to an understanding. We consider this to be a pipeline of peace,” Reddy said, addressing a joint press conference with Hussain.

“It’s only through development of common economic stake, we can reduce tensions and suspicions,” he added.

Turkmenistan has the world’s fourth largest reserves of natural gas. India and Pakistan are both keen to tap this source through a pipeline via the Central Asian country’s eastern neighbour, Afghanistan.

“The issue of transit fee is being discussed with Afghanistan. A joint strategy is being evolved between India and Pakistan on this issue,” Hussain said, referring to the proposal that was formalised among the four countries in 2008.

“We also intend to have a joint strategy on the up-stream sector in Turkmenistan where it is developing gas fields,” he added, speaking about India and Pakistan hoping to help in developing and exploiting gas fields in the Central Asian country.

In 2008 when the four countries had signed the gas pipeline framework pact in Islamabad, the Asian Development Bank had estimated the cost of what is called the TAPI pipeline project at $7.6 billion and had also expressed desire to partially fund it.

According to industry sources, Turkmenistan’s gas reserves are exceeded only by Russia, Iran and Qatar.

China has already tapped into Turkmenistan’s gas reserves with a 1,800-km pipeline that was laid in late-2009 that runs through Uzbekistan and Kazakhstan to reach its western region, and connecting further via a domestic channel to reach Shanghai in the east.

This was the third meeting with Pakistan on the issue of transit fee but the first one at the political level.

Asked about security concerns surrounding a gas pipeline passing through Afghanistan, Reddy said, “When we agree on economic issues, that generates its own positive dynamic. It, in fact, contributes to the feelings of goodwill on all sides. ”

“As time goes by we are confident of dealing with security issues, because the government of Afghanistan and the people of Afghanistan are keen on the pipeline. Everybody needs gas, there is a common stake in it.”

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