TAP likely to bring more Caspian gas to European markets, Managing Director says
Baku, Azerbaijan, Jan. 19
The onshore construction activities of the Trans Adriatic Pipeline (TAP) will begin in all countries mid-2016, with the offshore scope starting in the winter of 2017/2018, Ian Bradshaw, Managing Director at TAP AG said in an interview to AzerNews.
"TAP's progress continues to be in line with the project schedule, which ensures we will be ready to transport Shah Deniz II gas to Europe early 2020," Bradshaw said.
TAP effectively started construction in Albania in June 2015 with the rehabilitation of access roads and bridges, and marked the occasion with a ceremony attended by Albanian Prime Minister Edi Rama and Energy and Industry Minister Damian Gjiknuri.
The 878 km TAP pipeline will transport Azerbaijani natural gas from the giant Shah Deniz II field through the last leg of the Southern Gas Corridor, connecting with the Trans Anatolian Pipeline at the Turkish-Greek border at Kipoi and then crossing Greece, Albania and the Adriatic Sea, before coming ashore in Southern Italy.
Early 2016, award of major procurement contracts are expected to be completed within the TAP. These contracts include offshore pipeline construction and line pipes, compressor stations.
Last year TAP concluded the contracts for access roads and bridges, turbo compressors and ball valves.
Bradshaw further noted that TAP is fully aligned to the Shah Deniz II development schedule.
"TAP will be ready when the first gas is available for delivery to Europe. Currently, the Shah Deniz Consortium plans first gas deliveries to Georgia and Turkey for late 2018, and first deliveries to Europe will follow approximately a year later, in 2020," he said.
Asked about the competitive advantages of SGC for other possible suppliers like Turkmenistan or Iran, he said TAP is designed to double its capacity to 20bcm/a by installing additional compressor units and stations - which will be an extremely cost efficient solution to bringing a further 10 bcm/a of gas to Europe.
Bradshaw assured that this flexibility will enable TAP to transport additional gas volumes in the future.
"Indeed, TAP is the European leg of the Southern Gas Corridor, which is one of the most complex energy projects worldwide. While TAP will initially transport 10bcm/a from the Shah Deniz II field in Azerbaijan, our pipeline can double its capacity once additional gas resources come on stream. TAP is likely to bring more Caspian gas to European markets in the future," he said.
"TAP's landfall in Italy provides multiple opportunities to some of the largest European markets such as Germany, France, the UK, Switzerland and Austria. TAP's contribution to energy security and diversification will perhaps be most significant in South Eastern Europe. TAP remains committed to facilitating connections to several infrastructure projects such as the Interconnector Greece - Bulgaria (IGB) and the Ionian Adriatic Pipeline (IAP)."
Asked about the impact on TAP should the trend of low oil continue, Ian said a low oil price scenario leads all to look at cost across operations and with contractors and sub-contractors.
"TAP is no different; we will continue to ensure we execute the TAP project with exemplary cost control," he said.
"However, in more macro terms the energy industry is a long wavelength one used to oil price cycles and makes investment decisions for the long-term. Our project is underpinned by long-term gas transportation agreements for 25 years, which were agreed and signed by the buyers and shippers of Shah Deniz gas in September 2013."
Bradshaw also pointed to the fact that the project's Board took a Resolution to Construct - effectively the project's Final Investment Decision (FID) - in November 2013, saying this means that TAP's shareholders have formalized their commitment to invest in the construction of the pipeline, and the project is progressing according to schedule.
"Finally, TAP is a highly strategic gas project which contributes to Europe's energy security and diversification objectives. TAP will maintain a laser light focus on cost management, but safety will continue to remain our top priority throughout the life of the project," he said.
TAP will promote the economic development and job creation along the pipeline route; it will be a major source of foreign direct investment and it is not dependent on grants or subsidies. With first gas sales to Georgia and Turkey targeted for late 2018, first deliveries to Europe will follow approximately in early 2020.
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).