Afghanistan inks 30-years gas supply contract with Turkmenistan

Afghanistan and Turkmenistan signed the Contract on Sales and Purchase of gas under the Turkmenistan-Afghanistan-Pakistan and India (TAPI) gas pipeline project which will have a duration of 30 years.

The Foreign Affairs Ministry of Afghanistan following a statement on Saturday announced that the contract was signed on the sidelines of the “The 17th Steering Committee Meeting on Turkmenistan-Afghanistan-Pakistan-India TAPI Project”, which was held on 9 of July in Ashgabat.

The statement further added, the meeting was hosted and chaired by Khojamukhamedov the Deputy Prime Minister of Turkmenistan, in which the ministers of petroleum and mines, ambassadors, officials of the ministries of foreign affairs and technical agencies of the member countries participated.

This contract was signed between Afghan Gas and Turkmen Gas companies and the Ministries of Mines and Petroleum of Afghanistan and Turkmenistan, the foreign ministry said in statement adding that the signing of this contract is considered as a fundamental and practical step towards implementing the TAPI Project through which Afghanistan will address its gas needs for the next 30 years.

Afghanistan will purchase 500 million cubic meters of gas in the first ten years, and 1bilion and 1.5 billion cubic meters of gas annually in the second and third ten years respectively, foreign ministry officials said.

The gas imported from Turkmenistan will be used for industries and generation of power for homes and factories.

According to Afghan foreign ministry, the four countries in the meeting agreed to establish a joint consortium in cooperation with the Asian Development Bank. The consortium will be called TAPI Ltd, and will be formed by the end of 2013 which will comprise of the gas companies of the member countries.

TAPI Project is one of Afghanistan’s major regional projects. The length of this project is 1800 km and passing through the borders of Turkmenistan and India, it will traverse several provinces. In addition to buying gas, Afghanistan will also play an important role as a transit country for implementation of this project.

As a result of the transit of this pipeline, Afghanistan will also earn about $ 500 million annually.