BAKU, Azerbaijan, Feb.12
By Leman Zeynalova – Trend:
The Southern Gas Corridor has opened a fourth gas import pipeline route for the EU, Robert Morris, principal analyst at Wood Mackenzie told Trend.
It will diversify supply and improve energy security – especially for the import-reliant target markets in Italy, Bulgaria and Greece, he said.
“The final leg of the corridor, the Trans Adriatic Pipeline (TAP), enhances Italy’s gas supply options. TAP is the first major pipeline project not underpinned by contracts with Eni. It will also improve the liquidity of Italy’s PSV gas hub and open more opportunities for south-to-north flows in the country,” noted the analyst.
Morris went on to add that for the Southern Gas Corridor project and its many stakeholders, TAP’s launch is the end of the beginning, not the end itself.
“A scenario without TAP expansion to 20 bcm per year would be a failure against the initial objectives, especially for European supply security. All eyes will be on the binding phase of TAP’s market test in summer 2021. This could be a bellwether for the post-lockdown recovery of European gas fundamentals
Despite the European Green Deal and current market uncertainty, we are positive on the outlook for TAP expansion. However, regional gas dynamics have shifted since TAP construction started in 2016, especially thanks to Turkey’s recent giant Black Sea gas discovery. More Azerbaijani gas had been the initial hope to fill TAP expansion, but this is looking increasingly unlikely because of challenging project economics and better-positioned supply alternatives, including Russian gas,” he added.
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