Interest for TAP’s short-term capacity increasing significantly

Oil&Gas Materials 15 May 2024 09:59 (UTC +04:00)
Interest for TAP’s short-term capacity increasing significantly
Laman Zeynalova
Laman Zeynalova
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BAKU, Azerbaijan, May 15. Interest for the Trans Adriatic Pipeline’s (TAP) short-term capacity is has increased significantly, Vugar Veysalov, TAP’s Head of External Affairs, said addressing the Belgrade Energy Forum, Trend reports.

“TAP has been safely transporting natural gas from Azerbaijan to Greece, Bulgaria and Italy in a sustainably reliable way for almost three and half years now. Since the start of our commercial operations, we have been recognised as an integral energy infrastructure for Europe bringing gas from a new source and from an alternative route in a period, when the continent has faced significant energy supply challenges. To address Europe’s increased energy security needs during the past couple of years, we have proactively maximised the capacity and the volumes transported to the markets. TAP’s initial capacity – approximately 10 bcm per year (bcm/a) – has been allocated to shippers and booked for 25 years, in line with the long-term gas transportation contracts signed in 2013. However, we also offer short-term bookings through the PRISMA capacity booking platform and in line with the ENTSOG Auction Calendar. Since the start of our commercial operations at the end of 2020, the interest for our short-term capacity has been significantly increasing,” he said.

Veysalov noted that TAP has positioned itself as a proactive operator, leveraging the operating conditions of the pipeline to maximise the capacity offered and volumes transported to the market.

“We have also developed commercial products – in line with international best practice – capturing all the market interests and increasing the use of short-term capacity on top of long-term commitments and short term regulatory obligations. The pipeline is being used as a network and gas is being shipped not only westwards towards Greece, Bulgaria and Italy, but also from Italy to Greece and Bulgaria, and through the trades on the TAP virtual trading point, gas through TAP and thereafter IGB reached Western Balkans’ markets,” he said.

Veysalov noted that since the start of operations, TAP has transported over 35 billion cubic meters (bcm), of which 2.14 bcm were to Bulgaria, 3.37 to Greece and 29.22 to Italy.

“In 2023 alone, TAP transported 11.50 bcm. The gas transported via TAP accounted for 16% of the total gas imported in Italy and 18% in Greece. These are significant accomplishments, but in the future, we can further contribute to Europe’s security of energy supply and decarbonisation objectives, if we progressively double the pipeline’s capacity. TAP’s expansion capacity is offered to the market through regular Market Tests organised every odd year. The 2021 Market Test, which was completed in January 2024, resulted in binding commitments which will add an extra 1.2 bcm/a to the pipeline capacity by December 31, 2025. The works necessary for achieving the first level of expansion are progressing smoothly. This first level of expansion could pave the way for further expansions, which can be achieved in steps through participation in the next Market Tests, provided there is interest from the market. TAP’s 2023 Market Test is still ongoing, with the binding bidding phase expected in mid-2025. The results of these Market Tests are a matter of market demand,” he added.

Veysalov went on to add that natural gas will undoubtedly remain an important part of Europe’s energy mix and has a key role to play in the energy transition.

“Gas-fired power plants offer the on-demand power needed to compliment intermittent renewables. Combined with the application of innovative technologies, natural gas can help achieving EU’s 2050 carbon neutrality goal. In the long-term, existing gas infrastructure could be retrofitted for the transportation of decarbonised or renewable gases. As Europe transitions to a low carbon future, it still requires a diverse, secure, reliable and affordable energy supply to develop its economy, warm its homes and remain competitive. At TAP, we are focused on making sure the transition happens in a sustainable manner, especially in South-East Europe and the Western Balkans, a region overly reliant on heavy fossil fuels.

At a regional level, TAP supports the EU’s objective of supplying gas to Southeast Europe and has been recognized by the EU’s Directorate General for Neighbourhood & Enlargement as a flagship project for the decarbonisation of the Western Balkans, as it fosters access to cleaner and affordable energy in the region and reduces dependency on a single source gas supplier,” he said.

TAP transports natural gas from the giant Shah Deniz field in the Azerbaijani sector of the Caspian Sea to Europe. The 878 km long pipeline connects with the Trans Anatolian Pipeline (TANAP) at the Turkish-Greek border in Kipoi, crosses Greece and Albania and the Adriatic Sea, before coming ashore in Southern Italy.

TAP facilitates gas supplies to South Eastern European countries through existing and prospective interconnectors. TAP is connected to Interconnector Greece Bulgaria (IGB) which started its commercial operations in October 2022, providing Caspian gas to Bulgaria, enhancing security of energy supplies in one more European country. TAP’s exits in Greece and Albania, together with the landfall in Italy provide multiple opportunities for further transport of gas from Azerbaijan to the wider European markets.

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