ISLAMABAD, April 24: Pakistan, India and Afghanistan on Thursday signed a framework agreement to buy natural gas from Turkmenistan, despite the cost of laying a pipeline from the Central Asian state having increased to $7.6 billion from the earlier estimate of $3.3 billion.

The original agreement signed by three countries in December 2002 was revised to allow India to join the US-backed gas pipeline project for importing gas from Turkmenistan by 2015 to meet its growing energy needs.

Thursday’s agreement came amid uncertainties surrounding the Iran-Pakistan-India (IPI) pipeline project.

Indian oil minister Murli Deora who attended the meeting here on Thursday, will hold a meeting on the unresolved issues of transit fees and transportation tariff for the IPI project with his Pakistani counterpart on Friday.

The United States is discouraging Pakistan and India from importing gas from Iran through the $7 billion pipeline and has been backing the Turkmenistan project as an alternative.

Ministers from Turkmenistan, Afghanistan, Pakistan and India agreed in their 10th steering committee meeting held over the past two days to start work on the much delayed TAPI project in 2010.

The project will supply 3.2 billion cubic feet of gas per day through the 56-inch diameter pipeline starting from the Dauletabad field in Turkmenistan to Fazilka at the Pakistan-India border, passing through Herat and Kandahar in Afghanistan and Multan.

Addressing a joint press conference, Minister for Petroleum and Natural Resources Khwaja Mohammad Asif said that despite the significant increase in project cost estimates it was considered economically and financially viable.

Turkmen Minister for Oil and Gas Industry Dr Baymurad Hojamuhamedov said huge new gas reserves had been found in his country and it would award the contract for certification of reserves of various fields to a British consultant by the end of the current month.

He said the total gas reserves in Turkmenistan were about eight trillion cubic metres.

Mr Asif said the countries had agreed to formulate a long-term pricing mechanism which would be attractive to the buyers as well as the seller, and reflect the new market trends.

Indian Minister Murli Deora confirmed that talks were being held on the IPI pipeline plan with his Pakistani counterpart.

Asian development Bank’s country director Peter Fedon said the bank had facilitated the signing of the TAPI agreement. However, he evaded answering a question about possible assistance for the IPI project.

Turkmenistan informed the meeting that the audit report on certification of its reserves would be available by Sept 30.

The parties agreed that a technical working group would prepare a draft of the gas sales and purchase agreement by Dec 31. The next meeting of the group will be held in New Delhi by October.

The ADB agreed to take up the issue of a comprehensive review of the feasibility study in order to move forward to the next phase of inviting investors’ interest in the project.

The parties agreed to form a consortium of investors to undertake the detailed feasibility study and further actions.

Afghanistan proposed to take up to five million cubic metres per day in the first two years after implementation of the agreement and up to 14 million cubic metres of the 90 million cubic metres allocated to the project from the third year. Pakistan and India agreed to equally share the remaining volume.

The member countries will discuss the issues of payment of transit fees to Afghanistan and Pakistan, taxation structure and consortium procedures by 2009.