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    Turkmenistan Issues Tapi Tenders

Summary

Turkmenistan’s state-run Turkmengas announced July 3 a tender related to its $10bn gas export pipeline but its ability to attract credits from international entities is under question.

by: Dalga Khatinoglu, Goynur Shukurova

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Natural Gas News, Asia/Oceania, Corporate, Exploration & Production, Import/Export, Contracts and tenders, Political, Ministries, Infrastructure, Pipelines, TAPI, News By Country, Turkmenistan

Turkmenistan Issues Tapi Tenders

Turkmenistan’s state-run Turkmengas announced July 3 a tender related to its $10bn gas export pipeline but its ability to attract credits from international entities is under question.

Turkmengas issued a tender for the turn-key design, supply, construction and commissioning of a two-unit compressor station in the Turkmen section of the Turkmenistan-Afghanistan-Pakistan-India (Tapi) gas pipeline, with a September 5 deadline.

The country began building Tapi in 2015, but stopped after laying 25 km of it when plunging oil prices slashed its revenues.

Turkmenistan has 85% of the $10bn project, the other three countries having 5%. The figure is huge for a country as small as Turkmenistan: its annual budget in 2018 was set at manat 95bn: that is $27.29bn based on the official exchange rate but only $11.2bn in open market exchange rate.

Turkmengas said that companies that successfully prequalify for both lots will automatically prequalify for each lot individually and will be eligible to award contracts for both or for each lot individually, so this is an invitation for prequalification only.

The company also said that it has applied for a loan from the Islamic Development Bank (IDB) to pay for the services provided and it intends to use part of it to pay the winner. IDB declined to comment, but it has published loan agreement for Turkmenistan’s Tapi project on its website in 2015 without mentioning further information.

Turkmenistan has been negotiating for years with the Asian Development Bank (ADB) on borrowing funds. ADB’s project officer, Fong Chin Choon told NGW  that ADB has been discussing sovereign financing with the Turkmen government but no details or terms have been agreed.

The future of the line has long been in doubt owing to continuing security problems in Afghanistan and the arrival of large volumes of LNG on to world markets. This means buyers have alternative sources of supply that were not envisaged when Tapi was thought up many years ago.

A civil war is still raging in Afghanistan, where five members of Tapi team were killed in Kandahar province May 22. Using LNG imports, Pakistan and India are able to manage their current and future demand requirements. The 1,800-km pipeline was projected to transfer 33bn m³/yr of gas from Turkmenistan’s giant Galkynysh gas field to participating countries by 2020.