Turkmenistan says work has started on Afghan section of gas pipeline to Pakistan, India

Turkmenistan announced the start of construction work on the Afghan section of an $8 billion natural gas pipeline that will link the energy-rich Central Asian nation to Pakistan and India. (Reuters)
Updated 23 February 2018

Turkmenistan says work has started on Afghan section of gas pipeline to Pakistan, India

SERHETABAT: Turkmenistan on Friday announced the start of construction work on the Afghan section of an $8 billion natural gas pipeline that will link the energy-rich Central Asian nation to Pakistan and India.
Ex-Soviet Turkmenistan holds the world’s fourth-largest natural gas reserves but has been heavily dependent on gas exports to China after Russia cut back gas imports in the past few years.
“Galkynysh, the world’s second-biggest gas field, will feed the TAPI (Turkmenistan-Afghanistan-Pakistan-India) pipeline,” Turkmen President Kurbanguly Berdymukhamedov told reporters gathered in a town near the Turkmen-Afghan border through a video link.
Berdymukhamedov was in the western Afghan city of Herat together with Afghan President Ashraf Ghani, Pakistani Prime Minister Shahid Khaqan Abbasi and India’s Minister of State for External Affairs M.J. Akbar.
The TAPI project, supported by the United States and the Asian Development Bank, has been touted by Turkmenistan since the 1990s. But starting work on the pipeline has been delayed because of the problem of crossing Afghanistan.
The pipeline will allow Turkmenistan to find new consumers in Asia and cut its dependence on Beijing, which buys about 35 billion cubic meters (bcm) of gas annually.


Oman’s bond market return a key test for reform path

Updated 21 October 2020

Oman’s bond market return a key test for reform path

  • After becoming ruler in January, Sultan Haitham made shaking up and modernising state finances a top priority

DUBAI: Oman’s return to the international bond market this week will be a test of its ability to convince investors that long-awaited fiscal reforms have started to put it on a sustainable financial footing.

Oman, rated below investment grade by all the major credit agencies, announced on Monday plans to issue bonds with maturities of three, seven and 12 years, in what would be its first global debt sale this year.

Sultan Haitham, who became Oman’s ruler in January, has made shaking up state finances one of his priorities.

But investors would like to see more concrete steps being taken and, after a further sovereign downgrade last week, may require the new bonds to offer a significant premium over the country’s existing debt.

“The new sultan has done some good things — rationalizing the number of ministries, the implementation of VAT, plans to generate additional tax revenues, and they still have sovereign assets,” said Raza Agha, head of emerging markets credit strategy at Legal & General Investment Management.

“There is positive momentum but it will take time for that credibility to build.”

According to a bond prospectus, Oman has begun talks with some Gulf countries for financial support.

“I don’t think this will actually be taken into consideration by investors unless there is a tangible announcement from Gulf countries with a tangible support package,” said Zeina Rizk, executive fixed income director at Arqaam Capital.

Oman will likely price the new three-year bonds in the high 4 percent area, the seven-year tranche in the high 6 percent and the 12-year in the mid-to-high 7 percent area, implying a premium of at least 50 basis points (bps) over its existing curve, she said.

Two other investors, who did not wish to be named, said the paper could carry a 25 bps premium over existing secondary trading levels.

Sources have previously told Reuters Oman would target over $3 billion with the new deal.

“If they take $3 to 3.5 billion, you will have a market indigestion for Oman, and I’m sure people will ask to be compensated for this risk,” Rizk said.