Turkmenistan agreed on Wednesday to supply natural gas to Pakistan and India in deals that offer major economic benefits but depend on building and defending a US-backed pipeline across chronically unstable Afghanistan.

The route, particularly the 735-km leg through the Afghan provinces of Herat and Kandahar, will need billions of dollars in funding.

It faces significant security problems as the Western Nato alliance plans to hand control of Afghanistan to Kabul’s own security forces by the middle of next year.

New Delhi: Kicking-off work on the long discussed US-backed Turkmenistan-Afghanistan-Pakistan-India gas pipeline, India and its new energy partners on Wednesday signed agreements that will pave way for laying of the 1,680-km line. Turkmenistan — which holds more than 4% of the world’s natural gas reserves signed agreements to sell gas to India and Pakistan through the $ 7.6 billion pipeline at the Caspian Sea resort of Avaza.

New Delhi: By the time you read this, the price of petrol would have gone up by more than Rs 7.50 a litre across the country. The increase, the steepest-ever, came a day after Parliament’s Budget session ended and PM Manmohan Singh talked about the need for “difficult decisions”. After adding state taxes, petrol will cost Rs 73.18 a litre in Delhi, Rs 78.57 in Mumbai, Rs 77.88 in Kolkata and Rs 77.53 a litre in Chennai. This marks an increase of around 10% and puts a squeeze of about Rs 6,000 a year on a family that spends an average of Rs 5,000 per month on petrol.

India on Wednesday signed the gas sale purchase agreement (GSPA) for the Turkmenistan-Afghanistan-Pakistan-India (Tapi) gas pipeline, which upon completion would diversify its gas basket. With domestic gas output stagnating, the $7.6-billion Tapi gas project provides a ray of hope.

In five years, the country would have access to imported natural gas, in addition to imported liquefied natural gas and domestic sources, including coal bed methane gas.

Turkmenistan on Wednesday signed agreements with India and Pakistan to deliver gas through a new pipeline that will transit Afghanistan, the first contracts in the ambitious project.

The 1,700-kilometre (1,050-mile) TAPI pipeline aims to transport more than 30 billion cubic metres of gas annually from Turkmenistan to energy-hungry consumers in Pakistan and India as well as relieving shortages in Afghanistan.

Final round of talks among the four participating counties of Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project would be held in Kabul on April 19 to finalise the structure of the much-needed energy project for India and Pakistan. Federal Secretary Petroleum Mohammed Ejaz Chaudhry, after his return from India where he attended 7th Asia Gas conference, stated this while talking to a group of journalists here on Wednesday.

With rupee depreciation leading to jump in oil import bill, petroleum minister S. Jaipal Reddy on Tuesday said there is an immediate need to raise fuel prices, but refused to say when the hike will actually take place.

“It (price increase) is very essential but (before hiking rates) we have to talk to political parties,” he told reporters here on way to Ashgabat for signing of the agreement for the Turkmenistan-Afghanistan-Pakistan-India pipeline.

Pakistan will finally ink the gas deal with Turkmenistan in Ashgabad on May 23-24 under which it would start importing in 2016 the gas of 1.365 bcf per day under $ 7.6 billion TAPI gas line project at a cost of 70 per cent parity of crude oil at Multan and 50 percent of crude oil at Afghan border, a senior official told Pakistan Observer.

“A delegation headed by Minister for Petroleum and Natural Resources Dr Asim Husain on Sunday left for Turkmenistan to sign Gas Sales Purchase Agreement. India which is also part of the project will also sign its GSAP with Turkmestan.”

Cutting cross party lines, Congress, SAD and BJP MPs have welcomed the TAPI project that will provide a major boost to power plants and other gas-based ancillary units in the state. Minister Petroleum S Jaipal Reddy is slated to visit Turkmenistan next week to sign a sale and purchase agreement. Sukhbir Badal, Deputy Chief Minister of Punjab, who was in Delhi today, said: “The TAPI project will revolutionise Punjab. It will help in industrialisation.” Punjab is already on the Gas Authority of India Limited (GAIL) pipeline grid.

Turkmenistan, Afghanistan, Pakistan, India to finalise agreement on transit fee next week. In an important decision, the Union Cabinet this evening gave its nod to sign a pricing agreement with Turkmenistan for the US-backed Turkmenistan-Afghanistan-Pakistan-India (TAPI) Gas Pipeline Project. The pipeline will terminate at Fazilka in Punjab.