BAKU, Azerbaijan, March 9
By Leman Zeynalova – Trend:
The start of the new year has seen the start of new gas infrastructure in South-South East Europe, Trend reports citing the International Gas Union (IGU).
“The Trans Adriatic Pipeline (TAP), connecting Azerbaijan (via TANAP in Turkey) to Italy, via Greece and Albania, was put into operations in December 2020, with some initial effects on hub price convergence between the Italian PSV and Dutch TTF and limited export flows from Italy towards continental Europe. In addition, Balkan Stream was also finalised, creating a new southern route for Russian gas to Bulgaria, Serbia and Hungary. Finally, the Krk terminal in Croatia – developed also with the support of European funding – was recently inaugurated,” said the company in its latest report.
IGU believes these projects will pave the way to further improve regional integration, foster security of supply and allow gas to positively contribute to the decarbonisation path especially in South-Eastern Europe countries, where coal still plays a substantial role in power generation.
“2020 has been an exceptional year for European gas. Demand, which was projected to be strongly suffering from the effects of Covid-19, has diminished, but in a limited way, with gas prices recovering from around €5/MWh lows to the €20+/ MWh (around $255/’000 m3 ) registered at year-end, with a spike early in 2021 in connection to the Asian LNG demand surge,” said the company.
Gas power generation has seen a 4 percent reduction, in line with total electricity reduction, but it has substantially outperformed coal (-20 percent), thanks to its increased competitiveness, given the higher CO2 prices (with EU ETS reaching record levels of more than €35/mt CO2 in early February). Gas flows have also further demonstrated the European increasing role as a balancing hub for the global gas trade, with LNG dynamics and underground gas storage utilisation very closely correlated in a context of increasing price volatility, which will be the dominant element in markets also in 2021.”
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