Albania one step closer to Caspian gas from Azerbaijan as TAP becomes favourite pipeline model
TIRANA, Feb. 21 – Albania’s chances of getting of gas supply from an international pipeline boosted this week after Shah Deniz, the consortium developing a natural-gas field offshore Azerbaijan, announced it has excluded rival Interconnector Turkey-Greece-Italy, or ITGI, pipeline project from those being considered to transport the gas to Europe. This means that the Trans Adriatic Pipeline (TAP), the only project including Albania in its route, will be negotiating exclusively to transport the gas from the Caspian to Italy.
“We are pleased to confirm that TAP has been selected by Shah Deniz as the pipeline route to Italy. We will now enter into exclusive negotiations with them on progressing the project. We look forward to progressing the TAP project together with the Shah Deniz Consortium and the Italian, Albanian and Greek Governments,” TAP said in a statement.
“We firmly believe that TAP remains a strong contender to win the bid to transport Shah Deniz II gas to Europe. We are also confident that the TAP route to Italy offers the Shah Deniz consortium the most attractive market and the most advanced gas evacuation route.”
Two other projects, Nabucco and the South East Europe Pipeline, or SEEPآoth designed to carry the gas to Central Europeءre still in the competition.
Speaking in this week’s government meeting Prime Minister Sali Berisha described Albania’s gasification as the major project in the next four years, hopeful that Azerbaijan will decide on TAP.
“We are the only country in Europe without gas. We will soon set up a committee for the gasifacation of the country, a key condition for Albania’s development and the handling of the rapidly rising energy needs.”
Two weeks ago, Prime Minister Sali Berisha visited Azerbaijan with TAP and seeking Azerbaijani investors on top of the agenda during meetings with the country’s highest officials.
Prime Minister Sali Berisha has described TAP as the most feasible project bringing Azerbajani gas to European markets and of vital importance for energy supply further developing the Western Balkan region.
“Albania’s fast development pace strongly needs support by major projects such as the natural gas supply, which is a clean energy source,” Berisha told TAP representatives in Tirana last September.
Albanian experts have described TAP as an opportunity that would benefit Albania both economically and politically making it an important hub of the international gas pipeline for the Western Balkans. Apart from Vlora thermal power plant, TAP could also lower costs of natural gas, widely used in Albania for cooking and heating as a cheaper alternative to electricity.
Coming from a region characterized by overdependence on a single energy supplier, deputy Energy Minister Sokol Dervishaj has underlined that Albania’s top priority is to secure new supplies of oil and gas resources as well as to develop the Balkan gas ring. He expressed confidence that the Ionian Adriatic Pipeline and TAP would facilitate this process saying, “TAP is the only project in the Southern Gas Corridor that will fulfill both the objectives of the EU as well as those of the Energy Community This is the best project due to the good it can do for the region.”
The passing of the oil pipeline through Albania would also pave the way for the construction of the Ionian-Adriatic pipeline making Albania a gas hub to other Balkan regional countries. Entering from Greece at Miras in the Kor衠region, the Albanian section of the route stretches a total of 209km to the coast, north-west of Fier. The offshore section will be 60km in length, crossing the Adriatic Sea entering southern Italy.
TAP will be one of the largest foreign direct investments in Albania and it will help to develop the country’s energy infrastructure and thereby foster economic growth by creating employment, developing local skills, and being an important source of revenue for government. The pipeline can facilitate Albania in meeting its domestic energy needs by bringing Caspian gas to the Albanian market and providing a stimulus for future gas infrastructure in the country.
On the 23rd of February Trans Adriatic Pipeline started a nearshore survey north of Vlore in south-eastern Albania. The purpose of the investigation is to collect samples of the seabed soil near the Albanian coast along the planned route of the natural gas pipeline, which plans to bring Caspian gas to southern Italy.
Germany’s E.ON Ruhrgas, Norwegian energy company Statoil and Swiss-based EGL group have established a joint venture company to develop and operate the Trans Adriatic Pipeline. TAP aims to become operational in 2017 and would carry 10 billion cubic metres (bcm) of Caspian gas a year and be scalable to a maximum capacity of 20 bcm.
Opportunity for Vlora power plant
With domestic electricity production supply heavily dependent on hydropower plants and rainfall, TAP would be another opportunity to diversify production. Although finished since more than one year now, the new Vlora thermal power plant has not been put to use yet because of high fuel costs. State-owned power corporation, KESH, which has been forced to make expensive electricity imports during the past few months announced a tender to buy fuel for the Vlora thermal power plant in late 2011 but seems to have withdrawn as there has been no report of the power plant being put to use.
Experts have often criticized the high cost of electricity produced by the Vlora power plant which is at13 lek per kWh, is twice higher compared to the cost of imported electricity.
The new 97 MW, 112 million dollars low-sulphur distillate oil fuelled power plant is located at a six-hectare site about six kilometers from the coastal city of Vlora, southern Albania.
TAP
The Trans Adriatic Pipeline (TAP) is a natural gas pipeline project that will transport gas from the Caspian region via Greece and Albania and across the Adriatic Sea to Southern Italy and further into Western Europe. The project is aimed at enhancing security of supply as well as diversification of gas supplies for the European markets. TAP will open a new so-called Southern Gas Corridor to Europe and establish a new market outlet for natural gas from the Caspian Sea and beyond.
TAP’s transportation solution will be approximately 800 kilometres in length (Approx.: Greece 478 km; Albania 204 km; offshore Adriatic Sea 105 km; Italy 4 km). Transport will begin near the Greek-Turkish border (Komotini), cross Albania and the Adriatic Sea, and connect with the Italian natural gas distribution system near San Foca in Italy.
