BAKU, Azerbaijan, Sept.16
By Leman Zeynalova – Trend:
To allow further Shah Deniz 2 volumes to transit along the Trans Adriatic Pipeline (TAP) as part of the expansion phase, the whole Southern Gas Corridor will need to be expanded, with the TANAP pipeline also expanding, Trend reports citing S&P Global Platts.
“But the bearish winds currently blowing over Europe’s gas markets pose a big challenge. Between December 2013 – the year of the final investment decision on TAP phase 1 – and July 2020, spot gas prices at the reference TTF Dutch hub have dropped by 83 percent to a daily average of Eur4.80/MWh in July 2020 from Eur27.68/MWh in December 2013, according to Platts pricing data.
“The price level at which European gas markets will settle after the storm brought by the COVID-19 pandemic will be fundamental to understanding whether Azerbaijan would rather divert its additional gas volumes toward more profitable markets such as Turkey, which would also entail cheaper transportation. That could put paid to the expansion of the TAP pipeline,” said Platts.
TAP project, worth 4.5 billion euros, is one of the priority energy projects for the European Union (EU). The project envisages transportation of gas from Azerbaijan's Shah Deniz Stage 2 to the EU countries.
Connecting with the Trans Anatolian Pipeline (TANAP) at the Greek-Turkish border, TAP will cross Northern Greece, Albania and the Adriatic Sea before coming ashore in Southern Italy to connect to the Italian natural gas network.
The project is currently in its construction phase, which started in 2016.
Once built, TAP will offer a direct and cost-effective transportation route opening up the vital Southern Gas Corridor, a 3,500-kilometer long gas value chain stretching from the Caspian Sea to Europe.
TAP shareholders include BP (20 percent), SOCAR (20 percent), Snam S.p.A. (20 percent), Fluxys (19 percent), Enagás (16 percent) and Axpo (5 percent).
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