Is TAP only realistic option for Azerbaijan’s gas supply?

Is TAP only realistic option for Azerbaijan’s gas supply?

Trans Adriatic Pipeline (TAP) provides the only commercially and strategically realistic option of enabling gas to reach the South Eastern Europe (SEE) markets, TAP External Affairs and Communications Director, Michael Hoffmann said in interview to Natural Gas Europe.

“It is important that the SEE region is well prepared in the event of a disruption in gas supply,” Hoffmann said. According to Hoffmann, TAP can support energy security in two ways. The first is through the significant physical reverse flow capability of the pipeline (around 8 billion cubic metres annually). In addition, TAP is exploring the possibility of developing underground gas storage in Albania.

“This will effectively enhance the reliability and security of gas supply to the region,” Hoffmann said.

TAP, which is one of the projects within the Southern Gas Corridor, is designed to transport gas from the Caspian region via Greece and Albania and across the Adriatic Sea to southern Italy and further into Western Europe. Gas, which will be produced during the second stage of Azerbaijani Shah Deniz gas condensate field development, is the main supply source for the project.

Hoffmann stressed that TAP recognises the need for other SEE countries to receive gas and has consequently works to include development of the gas market in South Eastern Europe by interconnecting with the Ionian Adriatic Pipeline. “This would allow Croatia, Albania, Montenegro, Bosnia & Herzegovina, and Slovenia to benefit directly from new and abundant gas supplies from the Caspian,” he said.

Earlier this year Shah Deniz consortium excluded ITGI from the list of those being considered to export Azerbaijani gas to the European countries, and made TAP (Trans Adriatic Pipeline) a priority route for export of Azerbaijani gas to Italy.

Currently the consortium is considering options to export gas to the southern and central Europe, which include Nabucco West and SEEP. The pipeline route to this direction will be selected by late June, 2012. The final decision on a pipeline route to export Azerbaijani gas to the European markets is expected in 2013.

Hoffmann said that TAP remains the most competitive of the remaining pipeline options and will ensure that the $24 billion Shah Deniz upstream development can be effectively underwritten.

The initial pipeline capacity of TAP will be 10 billion cubic metres per year, expandable to 20 billion cubic metres per year. TAP’s shareholders are EGL of Switzerland (42.5 percent), Norway’s Statoil (42.5 percent) and E.ON Ruhrgas of Germany (15 percent).

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