The committee decided to set a six-month deadline for submission of Daulatabad gas field reserves certification by Turkmenistan; submission of a final/revised feasibility study by the Penspen Consultants of UK, asked Pakistan to submit a detailed study on its gas requirements after 2010 and constituted a working group to deliberate on various issues of the feasibility study.
The TAP gas pipeline project is a manifestation of Pakistan's efforts to make the available gas to the local consumers, including industries.
The TAP pipeline would be passing through difficult terrain, most of which is in need of continued political stability and security.
Such regional infrastructure projects have long gestation periods because of difficulties in finalizing the project details, arranging finance with sound guarantees for safety of loan and equity and the actual execution of the project in areas having different customs and work ethics.
The committee gave six months to Turkmenistan starting from January 2004 to present an audit of Daulatabad Gas Reservoir.
In the meantime, Turkmenistan would submit a Letter of Comfort with regard to availability of gas reserves to support the project.
The meeting was reportedly told that Turkmenistan was currently negotiating with two companies to conduct an audit of Turkmenistan gas reserves at Daulatabad field.
According to press reports, the committee decided that the Penspen Consultant should revise the feasibility study keeping in view the gas requirement in Pakistan as no formal response had been received from India.
The draft feasibility study was said to cover major routes and main aspects of the project; however, it was said that there is always room for improvement especially in a feasibility study.
It was agreed that the revised feasibility should include cost of the project and security issues with special reference to Afghanistan during construction and subsequent operation of the pipeline.
The consultants are supposed to table the final study before the committee in its next meeting to be hopefully held at Islamabad in four to five months time.
The estimated cost of the project reported in the press varies from $2.5 billion to $3.5 billion. This is understandable due to the fluid nature of project parameters at the moment.
The committee has formed a high-level working group consisting of two senior officials from each country, which will reportedly co-ordinate with the ADB on project-related activities, including the feasibility report.
Pakistan's Petroleum Minister reportedly said all the three countries have also signed a protocol and it is expected that the project will be completed at a cost of $3.5 billion by 2010.
Pakistani officials reportedly submitted in the meeting that demand in Pakistan in 2010 would be 200 to 500 million cubic feet per day in addition to the domestic production, while it would rise in the next five years to 1.4 billion cubic feet per day and would further go up to 2.5 billion cubic feet per day in 2025.
The committee asked Pakistan to submit a detailed study on its gas requirements after 2010 and decided that the size of the pipeline should be based on projected demand growth in Pakistan.
The country might come under great financial strain if the pipeline is designed at an excessive capacity say 1.5 to 2.0 billion cubic feet per day which is substantially larger than the supply gap estimated in the country by 2010.
Pakistan's Petroleum Minister said that the committee had finalized the route of the pipeline that would commence from Daulatabad in Turkmenistan and will be connected to Pakistan's main gas pipeline system at Multan via Kandahar in Afghanistan.
He said that the pipeline would also pass through the district of Dera Ghazi Khan. The southern route was chosen over a proposed northern path, which would have run through the Afghan capital Kabul on to Peshawar.
The selection of the southern route shows that Afghanistan would possibly not be utilizing TAP gas for Kabul and surrounding areas.
Thus, it appears now Pakistan is the only buyer of gas in stead of earlier expectation of three buyers, including India and Afghanistan.
India has not shown any response so far to the invitation and Afghanistan would probably be only a transit country.
According to existing understanding, the TAP project is delivering gas to Pakistan only and the pipeline is not being extended to Gwadar Port in Pakistan or to India.
In such a situation, Pakistan's contribution to the project could be kept within reasonable limit if the project is designed to deliver gas to Pakistan at the border near Quetta.
On taking delivery, Pakistan could carry gas through its own pipeline network to Multan, Karachi or other places through its existing gas pipeline network.
This project can provide valuable experience to Pakistani professionals and presumably the government has associated some of the technical and financial experts to assist the Ministry of Petroleum in this endeavour.
Long Term Credit Fund (LTCF) of the GOP for energy and energy related infrastructure is currently administered by the National Bank of Pakistan.
Association of the LTCF officials with the TAP pipeline project work is considered to be mutually beneficial.