South Asian gas demand strong enough for two pipeline schemes, says ADB Expert

22 Sep '05

4 min read

"However, with long term gas demand from India and Pakistan estimated at 50 BCM a year, there is a need for more than one pipeline," says Mr. Millison.

India already imports gas and demand will soar in the next decade. Pakistan, with its own reserves declining, is expected to begin importing gas after late 2008. In fact, projected demand in South Asia is so strong that there may be a need for a third pipeline from Qatar or Oman, notes Mr. Millison.

With the new gas reserves data in hand, as well as a draft security analysis report, the next step is for the project's steering committee to meet and discuss inviting an international consortium of investors to build the pipeline.

Turkmenistan is a largely desert country with proven recoverable natural gas reserves of 71 trillion cubic feet (TCF, about 2 trillion cubic meters) and possible reserves of over 200 TCF (about 6 trillion cubic meters).

It is one of the world's largest gas exporters. However, although its 4.5 million people receive free gas, electricity and water, incomes are among the lowest in Central Asia and health and education services are declining.

With large gas reserves and a small population, Turkmenistan's export potential is huge, though substantial investments are needed to increase production. Turkmenistan currently pipes most of its gas to Ukraine and Europe via Gazprom, the Russian utility, though it has also a small pipeline to Iran.

It recently renegotiated a 25-year agreement with Russia to sell gas at $44 per 1,000 cubic meters, and settled short-term contracts with Ukraine selling at $58 per 1,000 cubic meters. Both agreements are on an all-cash basis, replacing an earlier mix of cash and barter.

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