Azerbaijan, Baku, Oct. 4 /Trend /
Azer Ahmedbeyli, Trend analytical centre expert
A memorandum of understanding - an inter-state agreement has been recently signed between the Italian, Greek and Albanian governments in New York to support the Trans-Adriatic gas pipeline project (TAP). It is difficult to unequivocally answer the question why Greece, which has unconditionally supported the Russian "South Stream" project since 2008, suddenly gave a "carte blanche" to the principal competitors of the Russian project. Why has Italy also supported the competitors of the Russian project, in which the Italian ENI is one of the major shareholders?
There are several major export routes of providing the European continent with gas - Russia, Norway and North Africa. Those European countries, which stand first in the export gas distribution, are in the best position as they pay less. Taking into account that the European system of reversible inter-connectors is being created and there is no single gas market in Europe yet, any European country wants to get gas, let's say, directly. If the TAP project is chosen as the final variant of exporting Caspian gas to Europe, Greece will become the first European country in its way. As for Italy, it has a chance to become a Mediterranean gas hub. Russian gas, as Norwegian and North African, is exported to Italy, so "South Stream" is an existing source of supply and another route from Russia for it. But TAP is a new source and a new export route. No one, including Italy, would want to miss the opportunity to become a destination for the "new" gas for Europe - the Caspian gas. By the way, the same can be stressed about the "Nabucco West" project.
Perhaps, the politics was used here. The talks about Europe's energy security amid its dependence on Russian gas have bothered everybody. However, the devaluation of the Russian gas dominance in Europe, where the consultations with the U.S play an important role, continues. It is no coincidence that the memorandum was signed in New York in the presence of the representatives of the U.S government.
BP Vice-President on Shah Deniz project Alistair Cooke's sudden statement was the first sign of demonstrating the signs of TAP increasing strength. He stated in June that the company intends to acquire a significant stake in the project. Then this statement left almost unnoticed and few people questioned why BP - leading shareholder of "Shah Deniz" consortium expressed the wish to buy a stake in TAP, rather than in "Nabucco West".
Second, one of the main advantages of TAP's competitor - Nabucco West while choosing a supply route to Europe has disappeared after signing the memorandum in New York. Nabucco West has already had a similar document guaranteeing the political support of the countries through which it must pass and creating the legal basis for the project implementation.
Third, "Nabucco West" project implementation greatly depends on international financial institutions' allocating the loans. Their share hit 70 percent of the total project cost. Around 30 percent fall to the shareholders' equity. A mandate letter on launching the project appraisal and due diligence verification was signed in 2010. Afterwards, the international financial institutions will decide whether to issue loans (about 4 billion euros) or not. Two years passed. At present, there is no information about the stage of the process and whether the loans will be granted to the project implementation or not.
As opposed to "Nabucco West", TAP project fully envisages domestic financing without the loans from the international financial institutions or state funds. This is its independence compared to "Nabucco West" and another sign of strength.
Fourth, the TAP consortium has recently begun the process of direct discussions with the Trans-Anatolian gas pipeline (TANAP) about the opportunity of connecting the two pipelines from a technical point of view.
"We have had a very constructive meeting ..., potential interaction between the two projects was the main subject of discussions," TAP External Affairs Director Michael Hoffman said in an interview with Trend. This fact stipulates that specific technical details can be discussed in anticipation of principal decisions.
Fifth, TAP investments in the Greek economy, creating temporary and permanent jobs while constructing and exploiting the pipeline, guaranteed gas supplies, all these factors will certainly work for the critically-endangered Greek economy. Perhaps, there is the main objective of the decision made in New York, because any initiatives enabling to restore it help the entire European Union to overcome the current crisis. This gives more chances to the TAP project implementation. This is also a sign of strength.