Baku, Azerbaijan, May 17
By Aygun Badalova - Trend:
Groundbreaking ceremony for the Trans Adriatic Pipeline (TAP) will be held in the Greek city of Thessaloniki May 17.
It is expected that the event will be attended by senior representatives of Azerbaijan, Greece, Georgia, Bulgaria and the European Commission, as well as representatives of shareholding companies of the project.
History of the project
TAP, which is a part of the largest Southern Gas Corridor project, envisages transportation of gas from the Stage 2 of development of Azerbaijan's Shah Deniz gas and condensate field to the EU countries. The project aims at providing European countries with alternative source and route of gas supplies, promoting energy security of Europe.
The consortium of Azerbaijani Shah Deniz field development in late June 2013 selected the TAP project over Nabucco West as the route to transport its gas to Europe.
The TAP's shareholders passed the Resolution to Construct on the development and construction of the TAP project Dec. 17, 2013. That followed the announcement earlier the same day by the Shah Deniz Consortium that it had taken the Final Investment Decision on the Shah Deniz Stage II project.
The contracts on the purchase of Azerbaijani gas from the second phase of Shah Deniz field development (Shah Deniz-2 project) were signed Sept. 19, 2013 with Shell, Bulgar gas, Gas Natural Fenosa, E.ON, Gaz de France, Hera, Enel, Axpo, DEPA.
At the beginning of March 2016, the European Commission approved the agreement between the Greek government and the Consortium on TAP's construction. TAP is included to the list of the European Commission's common interest projects.
Route of the Trans Adriatic Pipeline
The 870-kilometer pipeline will be connected to the Trans Anatolian Pipeline (TANAP) on the Turkish-Greek border, run through Greece, Albania and the Adriatic Sea, before coming ashore in Italy's south.
The length of TAP's Greek part will be about 550 kilometers. The pipeline will start near Kipoi on the border of Turkey and Greece and stretch until the border of Greece and Albania.
The Albanian part of the pipeline will be about 215 kilometers. It will start near the Korce city of Albania - on the border with Greece. TAP's landfall in Albania will be located 17 kilometers north-west of Fier, up to 400 meters inland from the shoreline.
TAP's route across the Adriatic Sea will take the pipeline approximately 105 kilometers along the seabed from the Albanian to the Italian coast.
As of today, the official cost of the TAP project hasn't been disclosed.
The Consortium on TAP's development expects to receive funding from a number of international institutions, including the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), as well as export credit agencies of several countries of the Organization for Economic Cooperation and Development (OECD), which are involved in the supply of goods and services.
The commercial lenders will mainly finance the TAP project. Currently, TAP is working on drawing up a financial plan that will take into account the ratio of debt and equity.
TAP's shareholding is comprised of BP (20 percent), SOCAR (20 percent), Snam S.p.A. (20 percent), Fluxys (19 percent), Enagás (16 percent) and Axpo (5 percent).
Earlier, the European Bank for Reconstruction and Development (EBRD) said that bank is considering financing of up to 1.5 billion euros for TAP.
In particular, the EBRD is considering up to 500 million euros of the bank's own money for TAP plus the bank will try to arrange with other banks up to one billion euros in a syndicated loan.
Opportunities and significance
Gas can be also supplied to several countries in South-East Europe, including Bulgaria, Albania, Bosnia and Herzegovina, Montenegro, Croatia and others via TAP by its joining the so-called Ionian-Adriatic Pipeline (IAP).
TAP has already signed memoranda of understanding and cooperation with the developers of this project, in particular, with Plinacro natural gas transmission system operator of Croatia, BH-Gas company of Bosnia-Herzegovina and Geoplin Plinovodi company of Slovenia.
Moreover, there has been created a ТАР and IAP working group which regularly holds meetings in order to synchronize the time of implementation of both projects and agree on the technical issues of connection.
Bulgaria can receive gas via the planned Interconnector Greece-Bulgaria (IGB) with the length of 182 kilometers. The initial capacity of IGB will be 3 billion cubic meters of gas. Bulgaria and Greece signed an agreement in December 2015 on adopting a final investment decision on the IGB project.
TAP's initial capacity will be 10 billion cubic meters of gas per year. However, it is possible to bring this volume to 20 billion cubic meters by installing additional compressor stations and modernizing the existing ones. Increasing TAP's capacity makes it possible to transport gas from other sources via this pipeline and this is an important element of the EU's diversification policy.