Trans Adriatic Pipeline Assumes Greater Regional Role
The Trans Adriatic Pipeline's (TAP) selection by the Shah Deniz Consortium established the long-awaited Southern Corridor Route and gave hopes for a new substantial diversification route for the whole of Europe.
At the 2nd Annual Balkan Oil & Gas Summit held September 24th and 25th in Athens, new information was made known revealing TAP as a project of great significance in terms of an integrated Southeastern European gas market and for the establishment of gasification infrastructure in several countries.
TAP's commercial director, Lutz Landwehr, gave a series of pointers of how the situation is unfolding in the region after the selection of the project and what lies ahead for all countries involved.
He noted that TAP is just the beginning for the opening of the Caspian basin producing countries into the EU, which would constitute a great step ahead in terms of diversification and gas security supply. In fact, the 10 bcm capacity flows per annum of TAP is a 'tiny little piece' as Landwehr noted compared to what lies ahead in the long-term.
Moreover, he added that TAP is in fact a piece of larger picture together with the Shah Deniz II consortium (SD II), the Trans Anatolian Pipeline (TANAP), SNAM's gas infrastructure company and the South Caucasus Pipeline (SCP) that all together have the dynamics to fulfill the opening of the Caspian fields to European markets. The total investment projects for the above is more than $50 billion and involve ten international companies and stretch over 4,000 km in distance.
Continuing TAP was mentioned as being characterized by some unique features. It was world class technical expertise through its consortium partners and at the same time it combines strong commercial aspects regarding the terms and conditions that have already been agreed for.
TAP's financial position is solid and it has strong intergovernmental backing by all countries involved. Countries such as Greece, Lundwehr noted, will benefit both economically through new investments and job creation, but also geopolitically through enchasing their regional role.
The Balkans would also be served by TAP through the combination of the Interconnector Greece-Bulgaria (IGB) scheduled to be completed by 2015, four years ahead of the first flow of Azeri gas by TAP. IGB, with its reverse flow capability, will be greatly served by TAP and vice versa, since the latter would also have such capability.
Another strong point is the proposed Ionian Adriatic Pipeline (IAP), which would link TAP from Albania to Montenegro-Bosnia-Croatia and from there on through to interconnectors in Central Europe. In countries such as Albania and Montenegro where there is no gasification, the TAP official assured that support will be provided by consortium partners for such an endeavor.
Panel Discussion
Participants included the head of DEPA, Konstantinos Karayannakos and the CEO of Bulgartransgaz and the director of strategic development of Croatian Plinacro. They all noted the significance of TAP for their own regional projects and noted the crucial role that Azeri gas from Shah Deniz will play in the coming decade into shaping an integrated Balkan market with a clear view into linking itself more closely with the rest of the EU.
The director of the Romanian Energy Center, Eugenia Gusilov, pointed out that although Romania betted on Nabucco instead of TAP, the capabilities of that country to sustain its own local production, along with synergies with its neighbors through the use of TAP, can make up for the loss of a pipeline route.
Lastly, a set of challenges for TAP was presented in the years ahead with regards to contruction including the procurement process that will occur with various industrial actors from different countries. Continuing the Lease and Acquisition Agreements (LEA) from the territories involved should take place and after deals with the governments and local communities and concurrently the project financing will secure funds from the international markets as the pipeline projects unfolds. It is expected that construction will commence in 2015 and by mid-2019 the first flow will become a reality.