Southern Corridor: “All Systems Go”

According to the various players involved in the Southern Corridor project to transport Caspian natural gas to Western Europe, everything is progressing according to schedule.

Michael Hoffmann, External Affairs Director, Trans Adriatic Pipeline (TAP), says indeed the pipeline project is on schedule and is moving into the execution phase, with the usual challenges related to procurement and land easement and acquisition. TAP has a new Managing Director – Ian Bradshaw – in place since February 2015 and he will lead the project through the key construction phase up to the start of operations in early 2020.

For example, contracts have been issued, he says, to build and reinforce approximately 100km of roads, 52 bridges in Albania that are needed for the project. He comments, “This pre works activity is needed to ensure that pipeline equipment can access the right of way in remote and difficult to access areas in Albania.”

And, he says, TAP has reached out to approximately 350 local companies to see how they can potentially participate in the project.

The land process, he explains, is very complex, “Just to give you a sense of scale, across the three countries we have 22,500 land blocks to make deals on: 11,800 in Albania, 10,500 in Greece and 200 in Italy.”

Moreover, he says there are 45,000 landowners and land users, meaning TAP must deal with a huge number of agreements, not to mention following EBRD standards. Nevertheless, land acquisition and easement in Greece and Albania are progressing well, he says.

“The main challenge now is to make sure that, when construction proper happens in 2016, that we have all of the land easement and land plots acquired, regulatory issues and permitting in place” explains Mr. Hoffmann.

Via various interconnecting infrastructure, like the Interconnector Greece-Bulgaria, he added that hopefully 1 bcm/a of Shah Deniz II gas will be delivered to Bulgaria via the TAP pipeline; deliveries might also be made into the western Balkan nations like Montenegro, Bosnia & Herzegovina and Croatia.

“It is one of the biggest and most complex energy projects being developed in the world, linking a source of gas production – the Caspian – with European gas markets, the largest markets for gas in the world,” says Janet Jonas, Head of Caspian Gas Marketing, BP, of the Southern Corridor. “It's been launched on the basis of the Shah Deniz field, a large gas condensate field in the Caspian sea of Azerbaijan which is already in operation, and serving customers in Azerbaijan, Georgia and Turkey.

“Stage II of Shah Deniz will bring gas not only to those markets, but an additional 60 bcm/a of gas along the Southern Gas Corridor, and also serve customers in Greece, Bulgaria and Italy with 16 bcm/a of gas.”

She describes the Southern Gas Corridor as “4 mega projects,” explaining, “Stage II of the Shah Deniz field, an expansion of the South Caucasus pipeline in Azerbaijan and Georgia, which is being expanded to cope with the additional 60 bcm/a production. But then there's also the Trans Anatolian Pipeline across Turkey, and TAP to bring the gas to Greece, Italy and Bulgaria, so it's a really complex project.”

Ms. Jonas reports that all is going well and on schedule.

BP being the operator, she says the company has drilled seven production wells, which will underpin the first sales and deliveries from Shah Deniz II. And, additional construction is underway at the Sangachal gas terminal, band and pipe are arriving for the first stages of construction, and work has begun on two new compressor stations in Georgia.

Everything is going ahead of schedule, insists Vitaliy Baylarbayov, ‪Deputy VP at State Oil Company of the Republic of Azerbaijan (SOCAR)‬, who says gas from Shah Deniz will come onshore in time, but that the pipelines must be coordinated. The timing must be perfect, he says, because there is not enough storage to accommodate the gas if it is not delivered. He recalls that in 2014 the awarding of the pipeline contract was made and construction activities commenced on 17 March.

-Drew Leifheit 

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