Germany’s E.ON Ruhrgas which will be building the pipeline’s land section has a 15 percent share in TAP compared to 42.5 percent by Norway’s Statoil which will carry out the pipeline’s sea section to southern Italy
TIRANA, July 22 – Germany’s E.ON Ruhrgas and Norway’s Statoil will be building Albania’s land and sea sections of the Trans Adriatic Pipeline, a strategic project expected to make Albania a regional gas hub by the end of 2020. Both companies are two of the three current shareholders of the TAP pipeline officially selected last June as the pipeline to bring Caspian gas to Europe through Greece, Albania and Italy. Germany’s E.ON Ruhrgas which will be building the pipeline’s land section has a 15 percent stake in TAP compared to 42.5 percent by Norway’s Statoil which will carry out the pipeline’s sea section through the Adriatic to southern Italy. The remaining 42.5 percent stake in TAP is owned by Axpo of Switzerland.
The whole 209 km construction in the land section will be carried out by E.ON Ruhrgaz, an experienced company, the second largest company in gas distribution after Russia’s Gazprom, Deutsche Welle in the local Albanian service reports. Meanwhile, the project’s sea section in Albania will be built by Norway’s Statoil, one of the largest oil and gas companies globally. Professor Stavri Dhima, a senior project manager at the Ministry of Economy and Energy says the investment on the Albanian section of the project is expected at USD 1.5 billion creating 3,000 jobs per year.
“It is estimated that 3,000 new jobs will be created each year and a total of 20,000 during the pipeline’s construction. The Albanian government’s deal with TAP envisages that the consortium will spend around Euro 2 million on the training of Albanian experts of different fields,” Dhima tells Deutsche Welle.
The pipeline developers plan to begin construction in 2015 and have the first gas by 2019. 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, experts say.
“Another gas pipeline, the Ionian-Adriatic is expected to link Albania to Croatia. Another project could also be Albania-Macedonia-Kosovo-Serbia or Albania-Kosovo-Serbia. These potential projects are made possible through TAP and will gasify the region,” says Dhima.
After its approval by the National Territory Adjustment Council, the TAP project in Albania is already in its implementation stage. “The project will kick off next year with the construction of roads where the pipeline passes. There are some 110 km of new roads that will be reconstructed. Some 209 km will be dug to insert the pipeline at a 1m depth. The pipeline’s 60 km sea section crossing the Adriatic to southern Italy will begin in 2015 and conclude in 2020,” adds Dhima.
The pipeline in Albania will cross in three Albanian regions which includes 38 local government units in Korca, Berat and Fiert where temporary and permanent expropriations will be carried out. Albania is expected to get considerable gas supply which will be used to supply the Vlora and Fier thermal plants as well as some key plants in the industry sector.
The BP-led Shah Deniz consortium officially announced on June 28 that the Trans Adriatic Pipeline has been selected as the winning project to carry Azerbaijani gas to Europe through Greece, Albania and Italy, beating rival Nabucco West project which ended in Austria.
The decision is expected to give a major boost to the crisis-hit Albanian economy and its top trade partners Italy and Greece facing recession. The investment would have a major impact on the contribution to GDP, number of jobs created and tax revenues raised, and most importantly, make Albania a regional gas hub, experts say.
Albanian experts have described TAP as an opportunity that would benefit Albania both economically and politically, making the country an important hub of the international gas pipeline for the Western Balkans.
With domestic electricity generation 100 percent dependent on hydropower plants and rainfall, TAP would be another opportunity to diversify generation especially in the newly-built Vlora thermal power plant which although made available for use since more than one year has not been made operational because of its high cost on fuel operation. TAP would also help the country’s gasification by offering gas, already massively used as a cheaper alternative to electricity for cooking and heating, although the country’s buildings lack gas infrastructure. 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, experts say.
Entering from Greece at Miras in the Kor衠region, the Albanian section of the route stretches a total of 209 km to the coast, north-west of Fier. The offshore section will be 60 km in length, crossing the Adriatic Sea entering southern Italy.
Outgoing Prime Minister Sali Berisha, who strongly lobbied TAP, has described it as the project of the century for Albania. “This is Albania’s greatest strategic achievement after the NATO membership,” said Berisha, adding that the TAP project would provide a final solution to the energy situation in Albania.
Azerbaijan’s SOCAR to assist country’s gasification
Azerbaijan’s state oil company SOCAR, which holds a 10 percent share in the Shah Deniz II consortium supplying Caspian gas to Europe through the TAP pipeline, says it is committed to closely cooperate with the Albanian authorities to draft a master plan on Albania’s gasification. In a meeting this week with Prime Minister Sali Berisha in Tirana, SOCAR’s president Rovnaq Abdullayev congratulated outgoing Prime Minister Berisha for his contribution and support to the selection of the Trans Adriatic Pipeline to bring Caspian gas to Europe as very important for Europe and the Balkan region. “A project of these dimensions with economic and geopolitical impact will serve as a cornerstone for the future development of Albania,” said SOCAR’s president. Outgoing Prime Minister Sali Berisha described TAP as a strategic project which offers real opportunities for the diversification of the energy resources in the country through Albania’s gasification not only for industrial but also residential purposes.
TAP’s economic impact
A study conducted by the prestigious Oxford University has demonstrated the substantial potential economic benefits for Albania by the landmark pipeline. Findings by Oxford Economics study show that during its four years of construction (2015-18), inclusive of direct, indirect and induced effects, TAP will contribute a total of Euro 370 million to Albanian GDP, create, on average, 9,900 jobs per year and generate Euro 90 million for the Albanian treasury.
In addition, during its expected 50 years of operation, inclusive of direct, indirect and induced impacts, the project is predicted to contribute a total of Euro 780 million to Albanian GDP, create 460 jobs per year, and generate Euro 470 million in tax revenues.
TAP’s investment is expected to provide a range of wider, ancillary benefits to the country. The project team expects to invest some Euro 60 million in Albania’s roads and other infrastructure, helping to pave the way for further growth in the country. Similarly the pipeline will help to cement the country’s strategic objective of becoming an energy hub for South East Europe, allowing it to supply gas to the entire Balkan region.
