TAP’s chances have received a boost in the past few months as a cheaper and faster alternative to EU-backed Nabucco West which has also been undermined by Russia’s even bigger project of a $39 billion South Stream plan
TIRANA, June 17 – While all eyes in Albania are currently on the June 23 elections, a major strategic decision awaits Albania only few days later when the winning pipeline bringing Caspian gas to Europe is announced in Azerbaijan. The BP-led consortium developing Azerbaijan’s Shah Deniz field is expected to make a decision over TAP or Nabucco West as the pipeline carrying natural gas to Europe on June 28, according to international energy portals.
The selection of the Trans Adriatic Pipeline, which also includes Albania in its itinerary, would be great news for Albania, giving a new boost to the striving economy which is suffering crisis impacts from the Euro area crisis and making Albania a regional gas hub.
Last May, the Shah Deniz consortium said it began evaluating binding transportation offers from the two pipeline consortia offering to carry gas from the Shah Deniz field in Azerbaijan into Europe but did not specify when the decision would be taken.
“The two consortia, Nabucco Gas Pipeline International and Trans Adriatic Pipeline (TAP), have been in extensive negotiations with the Shah Deniz consortium following delivery of their initial gas transportation offers at the end of March 2013. Those offers have now been approved by their shareholders and have become final and binding,” said Shah Deniz in a statement.
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.
TAP’s chances have received a boost in the past few months as a cheaper and faster alternative to EU-backed Nabucco which has also been undermined by Russia’s even bigger project of a $39 billion South Stream plan.
TAP shareholders and government officials from Italy, Greece and Albania are optimistic of TAP’s progress. Italy, Greece and Albania have already confirmed their political support to TAP with the signing of a trilateral deal.
‘TAP’s chances are almost sure because this is the most feasible and economical project of all and this is why this is a special moment for Albania where 2 billion Euros will be invested,” Prime Minister Sali Berisha has earlier said. Berisha is optimistic TAP would make Albania’s gasification at a low cost and turn the country into a gas distributor for the region.
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.
TAP’s partners are Statoil, Swiss EGL and Germany’s E.ON Ruhrgas who say that the pipeline could create thousands of jobs.
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.
Meanwhile, the Nabucco pipeline intended to reduce European reliance on Russian natural gas will link the Turkish-Bulgarian border to Baumgarten in Austria – one of the most important gas turntables in Central Europe – via Bulgaria, Romania and Hungary.
The presidents of Hungary, Austria, Romania and Bulgaria have recently urged Azerbaijan to support the proposed Nabucco West natural gas pipeline over a rival project.
The Nabucco shareholders are Bulgarian Energy Holding, Turkey’s Botas, Hungary’s FGSZ1, Austria’s OMV, and Romania’s Transgaz.
Impact on economy
If selected as the winning pipeline to bring Caspian gas to Western Europe, the Trans Adriatic Pipeline (TAP), which also includes Albania in its itinerary, would have a major impact on the contribution to GDP, number of jobs created and tax revenues raised, a study conducted by Oxford Economics has found out.
During its scheduled four years of construction from 2015 to 2018, TAP will contribute a total of Euro 370 million to the Albanian GDP, create on average 9,900 jobs per year and generate Euro 80 million for the country’s treasury. As a result, during its expected 50 years of operation, inclusive of direct, indirect and induced impacts, the project is predicted to contribute a total of Euro 2.7 billion to the Albanian GDP, create 240 jobs per year and generate Euro 2.5 billion 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.
Regional support
The Ministers of Foreign Affairs of six countries – Albania, Bosnia and Herzegovina, Croatia, Greece, Italy and Montenegro – met in Dubrovnik, Croatia, on 12th June to demonstrate their support for the Trans Adriatic Pipeline (TAP) and for the Ionian Adriatic Pipeline (IAP).
“We are pleased and grateful to receive strong and continuous political support for our pipeline. The Dubrovnik meeting is a testament to our project’s advanced status and unmatched benefits. TAP is the most strategic solution for supplying gas to South Eastern Europe: it will contribute to boosting energy security in the region and enhance economic development. With the Shah Deniz consortium decision on the Southern Gas Corridor expected by the end of the month, we remain confident that TAP is the best solution to transport Caspian gas to Europe: the shortest, most technically feasible and, above all, the only project ready for implementation,” said Michael Hoffmann, External Affairs Director of TAP.
