US Firms Eye TAPI Project

Turkmenistan’s Galkynysh gas field has been attracting interest from US energy giants. This gas field will be the source of the gas supplied to the TAPI pipeline.

However, the Turkmen authorities have made it clear that no equity participation in the upstream development of this giant field, Business Line said in a report. The country will offer service contracts for this purpose, the report added.

Phase I of South Yolotan is being developed (for gas supplies to China beginning 2013) on service contract basis. Those engaged in the job include Hyundai, Petrofac, and CNPC. Phase II of this giant field is for supplies to TAPI pipeline.

In a service contract, payment is made in accordance with the services rendered. However, the company rendering such services is not entitled to any share in oil/gas in that block.

While in a production-sharing agreement (PSA), the company concerned takes calculated risk in investing in an upstream venture and is entitled to its share (as stated in the agreement) in the resulting oil/gas production.

Business Line also said that road shows have been planned to attract players into the building and operating part of the TAPI pipeline project. The road shows will be held at Singapore, New York, London and Ashgabat, in a quick succession in September.