Dragon Oil in talks for $10bn gas pipeline

Irish-registered exploration firm Dragon Oil is in talks to invest in a $10 billion pipeline to deliver natural gas from Turkmenistan to India, a potential boost to the project after several western oil companies failed to secure a role.

The Tapi project has been delayed for years amid numerous challenges but is gathering pace as Turkmenistan, facing a plunge in revenues due to the oil-price fall, seeks new customers for its natural gas.

Construction will begin next month, Turkmen officials told an oil and gas conference in the capital, Ashgabat, last week. However, a search for a private-sector partner has so far proved fruitless: ExxonMobil, Chevron and Total dropped out amid declining oil prices and Ashgabat's insistence on retaining rights to its onshore gas reserves, the world's fourth largest. Turkmengas, the state company, was named as project leader this summer.

Faisal Rabee Al Awadhi, general manager for Dragon Oil in Turkmenistan, said the company had signalled its willingness to invest in Tapi.

Turkmengas is reportedly seeking to sell up to 34 per cent, reducing its stake to 51 per cent. Financial Times