TAPI Pipeline States to Select Consortium Leader

The four countries planning a gas pipeline from Turkmenistan to Pakistan and India via Afghanistan will in September pick a company to lead construction, paving the way to the start of work on the project, the Turkmen president said on Saturday.

Turkmenistan, a central Asian nation of 5.5 million, holds the world's fourth-largest natural gas reserves and sees the TAPI pipeline, named after the countries it is designed to cross, as a way of boosting exports.

It has won support from the United States but security concerns and costs estimated at $10 billion have caused delays.

"At this moment negotiations ... are entering the final stage, a consortium leader will be named in September, after which the implementation of the project will begin," President Kurbanguly Berdymukhamedov said during talks with visiting Indian Prime Minister Narendra Modi.

A Turkmen government official, who asked not be named, said construction work could start in December. Companies involved in the talks have not been named.

The 1,735 km (1,084 mile) pipeline, with a proposed annual capacity of 33 billion cubic metres (bcm) of gas, will run more than 700 km across Afghanistan on its way to Pakistan and India, raising questions about the stability of shipments via the chronically unstable country.

Yet the pipeline, to be built in three years, is crucial for Turkmenistan, which is currently dependent on gas exports to China, which buys annually 30 bcm of the fuel. Berdymukhamedov said the pipeline would attract $1 billion in investments to Afghanistan and create 12,000 jobs.

Russia, which imported more than 40 bcm of Turkmen gas in 2008, will buy no more than 4 bcm this year. Moscow says its development of gas fields elsewhere has made purchases of Turkmen gas unprofitable.

Turkmenistan's relations with Russian gas export monopoly Gazprom worsened this week after Ashgabat accused it of not paying for gas supplied this year. Gazprom declined comment.

Neighbouring Iran also buys small volumes of Turkmen gas.

(Reporting by Marat Gurt; Writing by Dmitry Solovyov; Editing by David Holmes)