The Trans Adriatic Pipeline will bring significant economic benefits to Southern Europe, particularly providing economic stimuli to two important Eurozone countries as well as Albania, says TAP’s managing director Kjetil Tungland
TIRANA, Nov. 20 – The Trans Adriatic Pipeline is on schedule to start building access roads to construction sites in Albania in 2014 in order to be in a position to launch the actual pipeline construction in 2015, says TAP’s managing director Kjetil Tungland. In an interview for AzerNews, Tungland says TAP, recently announced as the winning project to bring Caspian gas to Europe will diversify gas supplies in Europe and give a boost to the crisis-hit economies of EU-members Italy and Greece as well as EU aspirant Albania.
“TAP’s core benefit for Europe is the diversification of gas supplies. That said, our pipeline will bring significant economic benefits to Southern Europe, particularly providing economic stimuli to two important Eurozone countries as well as Albania,” said Tungland.
Referring to a study conducted by Oxford Economics, Tungland said TAP’s implementation will cost approximately Euro 1 billion and will foster significant economic activity by generating employment, sustaining infrastructure creation and developing local skills and capabilities. The study indicates that the direct impact of the project will peak in 2017, at which point activity could generate Euro 57 million for Albanian GDP and create 4,200 jobs annually.
TAP’s routing offers the possibility to link to key pipeline infrastructure projects in South Eastern Europe such as the Ionian Adriatic Pipeline (IAP), thereby facilitating supplies to some of the countries where new resources are needed the most – Albania, Bosnia and Herzegovina, Montenegro and Croatia.
“TAP can also facilitate new supplies to Bulgaria either via the planned Interconnector Greece-Bulgaria (IGB) or via reverse flow at the interconnection point Kula-Sidirokastro line.
It is important to clarify however that while we cooperate with various pipeline infrastructure project developers in several countries, TAP is not responsible for gas sales or the actual gas deliveries to those markets,” Tungland added.
On the political front, TAP is expecting the ratification of the Intergovernmental Agreement (IGA), signed between Italy, Greece and Albania in February 2013, in the Italian Parliament. The Italian Senate ratified the agreement on the 17th of October and the ratification in the Chamber of Deputies is pending. The IGA was already ratified in Albania (March 2013) and in Greece (April 2013).
Last summer, TAP announced that UK-based BP, Azerbaijan state energy company SOCAR and France’s Total, members of the international consortium developing the giant Shah Deniz field in Azerbaijan, exercised their option to join the Trans Adriatic Pipeline AG.
TAP’s shareholding is now comprised of BP (20 percent), SOCAR (20 percent), Statoil (20 percent), Fluxys (16 percent), Total (10 percent), E.ON (9 percent) and Axpo (5 percent).
TAP will transport natural gas from the giant Shah Deniz II field in Azerbaijan to the most attractive markets in Europe. The pipeline will connect with the Trans Anatolian Pipeline (TANAP) near the Turkish-Greek border at Kipoi, cross Greece and Albania and the Adriatic Sea, before coming ashore in Southern Italy.
Designed to expand the capacity from 10 to 20 bcm per year, TAP will open up the so-called Southern Gas Corridor. TAP will act as the link to Azerbaijan and other gas producers in the Caspian Sea and wider region, thereby enhancing Europe’s energy security, by providing a new source of gas.
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 will 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.
