Managing Director: TAP to provide Shah Deniz consortium with better netback price
Azerbaijan, Baku, June 8 / Trend A.Badalova /
The short route of the Trans Adriatic Pipeline (TAP) will allow the consortium of the Azerbaijani Shah Deniz gas field development to get a higher netback, TAP Managing Director Kjetil Tungland told in an interview to Trend in Baku.
"Considering the fact that TAP is the shortest gas pipeline, and therefore less expensive in terms of transit tariffs, TAP will enable buyers to offer a better price and as a result, the Shah Deniz consortium will receive a better netback," Tungland said.
Currently, the Shah Deniz consortium considers two options for its gas transportation to Europe - TAP and Nabucco West. The final decision on the pipeline route will be made in at the end of June, 2013.
The TAP project is designed to transport gas from the Caspian region via Greece and Albania and across the Adriatic Sea to the south of Italy and further into Western Europe.
The TAP route will be approximately 870 kilometres in length (Greece 550 km; Albania 210 km; offshore Adriatic Sea 15km; Italy 5 km).
With regard to the gas prices in targeted countries, which are one of the main selection criteria set by the Shah Deniz consortium, Tungland said that TAP can supply the countries in the Western Balkans, where the gas prices in the markets are relatively high. Tungland stressed that TAP will reach Italy, which is the second largest gas market in continental Europe and is easily connected to the other Western European markets such as Switzerland, Germany, France and the UK.
"The question then is whether there is a sufficient amount of buyers offering a sufficiently high price for gas," Tungland added.
According to Tungland, with TAP the Shah Deniz consortium can reach markets, which are either not supplied with gas at all or dominated by Russian supplies.
Talking about the further steps in case of being selected by the Shah Deniz consortium as the final European transportation route, Tungland said that the investment decision on TAP is scheduled to be made in late September this year by TAP's shareholders. The final investment decision on Shah Deniz 2 project is expected in October, 2013.
"Following the Final Investment decisions being taken, the tendering process for steel suppliers and construction bidding can start. The beginning of construction is expected late next year," Tungland said.
TAP's initial pipeline capacity will be 10 billion cubic metres per year, but is easily expandable to 20 billion cubic metres per year. TAP's shareholders are AXPO of Switzerland (42.5 percent), Norway's Statoil (42.5 percent) and E.ON Ruhrgas of Germany (15 percent).