Wood Mackenzie: TANAP's Caspian gas ambition to Europe reaches critical step

Wood Mackenzie: TANAP's Caspian gas ambition to Europe reaches critical step

Baku, Azerbaijan, March 18

By Aygun Badalova - Trend:

Groundbreaking ceremony for the Trans-Anatolian Pipeline (TANAP), took place on March 17, marks a critical step in the 15 year process to bring Caspian gas to central and western Europe - providing an alternative to a reliance on Russia gas supplies, Wood Mackenzie said in its report.

Wood Mackenzie is a global leader in commercial intelligence for the energy, metals and mining industries.

Samuel Lussac, Caspian Upstream research manager at Wood Mackenzie said that the ceremony confirms the Southern Gas Corridor is on schedule.

"The TANAP pipeline provides Europe with a new supply option from 2019. It also opens new markets, beyond Turkey, for Azerbaijan and operators in the Caspian Sea," Lussac said. But at the same time he also believes that the project will have to face up to Gazprom's clear intent to retain its market share in Europe through the Turkish Stream project.

Wood Mackenzie said in its report that both Turkish Stream and TANAP will be ending at Ipsala, where the Trans-Adriatic Pipeline (TAP) starts.

"TAP's initial capacity is exempt from third party access (TPA) for the next 25 years. But the European Commission has already ruled out TPA exemption for future TAP expansion. This means that any upstream project willing to capitalise on TANAP expansion is therefore likely to compete with Russian gas to access infrastructure west of Turkey," the report said.

On March 17, the foundation for TANAP's construction was laid in the Turkish province of Kars. The groundbreaking ceremony has kicked off with the participation of Azerbaijani President Ilham Aliyev, Turkish President Recep Tayyip Erdogan and Georgian President Giorgi Margvelashvili.

The TANAP project envisages the transportation of gas of Azerbaijan's Shah Deniz field from the Georgian-Turkish border to the western borders of Turkey.

TANAP's initial capacity is expected to reach 16 billion cubic meters of gas per year. Around six billion cubic meters of this gas will be delivered to Turkey and the rest of the volume to Europe.

Turkey will obtain gas in 2018. The gas will be supplied to Europe in early 2020 after the Trans Adriatic Pipeline (TAP) is constructed.

The approximately 870 km long TAP will connect with TANAP near the Turkish-Greek border at Kipoi, cross Greece and Albania and the Adriatic Sea, before coming ashore in Southern Italy.

The initial capacity of TAP will be 10 billion cubic meters per year, but it can easily be expanded to 20 billion cubic meters per year as the new volumes of gas come on stream. The construction of TAP is expected to start in 2016.

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