TAP awaits active support from Italian and Greek governments

Oil&Gas Materials 11 June 2012 13:20 (UTC +04:00)

Azerbaijan, Baku, June 11 / Trend A.Badalova /

The Trans Adriatic Pipeline (TAP) already cooperates with the Italian, Albanian and Greek governments at all levels and awaits more active support of the project after the Shah Deniz consortium's decision in June.

"We expect the support from the governments of Italy and Greece will further strenghten after the Shah Deniz consortium makes its selection between Nabucco West and SEEP later this month. After the decision is made, the competition between the Northern and Southern transportation routes will start, and we would see these countries' governments to be (even) more active in supporting TAP," Kjetil Tungland, Managing Director of TAP told Trend in interview in Baku.

In February, the Shah Deniz Consortium announced that TAP was selected as the exclusive export route for the southern option of transporting Azerbaijani gas to Italy.

Currently the consortium of the Azerbaijani Shah Deniz field development is considering the options to export gas to Central Europe, and currently includes the following European projects: Nabucco West and SEEP. The pipeline route to Central Europe will be chosen by late June, 2012. The final decision on a pipeline route to export Azerbaijani gas to the European markets is expected to be made by the end of 2012 or early 2013.

Tungland said that he considers SEEP and Nabucco as serious competitors to TAP, however among the benefits of the latter, is TAP's ability to transport gas to the sizeable and stable market in Italy and also provide options of supplying gas to South East Europe including the Western Balkans.

"Moreover, we can do this by offering the shortest route from Turkey to this market," Tungland said.

According to Tungland, the commercial concept of TAP is also beneficial for the Shah Deniz partners, enabling them to secure a higher netback.

"TAP's investors have a long history and experience in constructing pipelines as well significant technical capability and financial strength, so the Shah Deniz consortium can be comfortable that the pipeline will be delivered on time and on spec to receive first gas from Shah Deniz II in 2018," Tungland added.

Tungland stressed that TAP is continuing its technical engineering work to further develop the project and prepare for the Final Investment Decision to be taken before summer next year, in line with the Shah Deniz FID.

TAP is one of the Southern Gas Corridor projects, which is designed to transport gas from the Caspian region via Greece and Albania and across the Adriatic Sea to southern Italy and further into western Europe. Gas to be produced during the second stage of Azerbaijani Shah Deniz gas condensate field development is considered as the main source for TAP.

TAP's shareholders are EGL of Switzerland (42.5 percent), Norway's Statoil (42.5 percent) and E.ON Ruhrgas of Germany (15 percent).

The total length of TAP is approximately 800 kilometres. The initial pipeline capacity of TAP will be 10 billion cubic metres per year, expandable to 20 billion cubic metres per year.

Construction of TAP will start in late 2014, if the project is chosen as the preferred gas transportation solution by Shah Deniz consortium.