$45 Billion Project Signed to Carry Caspian Gas to Europe

$45 Billion Project Signed to Carry Caspian Gas to Europe$45 Billion Project Signed to Carry Caspian Gas to Europe

Five countries in southeast Europe formally signed off on the construction of a pipeline that will transport Caspian gas to European markets to ease their reliance on Russia.

The $45 billion Trans-Adriatic Pipeline project will cross through Georgia, Turkey, Greece, Albania and the Adriatic Sea.

European regulators cleared the project in March as part of Europe’s drive to secure energy supplies, Reuters reported.

The 870-km pipeline is part of the so-called “Southern Corridor” that will link Azerbaijan’s giant Shah Deniz II field with Italy. It is the largest endeavor to bring new supply sources to European consumers.

“The energy map of southeast Europe is being redefined and this turns Greece into an energy hub of the region,” Greek Prime Minister Alexis Tsipras said at an inauguration ceremony in the northern Greek city of Thessaloniki on Tuesday.

Around 10 billion cubic meters per year of Azeri gas should reach Europe by 2020 through TAP as well as the South Caucasus Pipeline through Georgia and the Trans-Anatolian Pipeline through Turkey.

TAP is owned by BP, Azeri state energy firm SOCAR, Italy’s Snam, Belgian company Fluxys, Spain’s Enagas and Axpo. Construction is expected to begin this summer.

The European Bank for Reconstruction and Development is considering financing of up to $1.7 billion for TAP, which would be the largest loan it has granted.

Total project costs, which include drilling, offshore platforms and terminals as well as pipelines, are $45 billion and the entire pipeline route will span 3,500 km, with TAP the final link into Europe.

Cash-strapped Greece has been seeking to boost its role as a regional energy hub and has said TAP fitted well with another gas pipeline scheme, Interconnnector Greece-Bulgaria, and a planned liquefied natural gas project off the northern Greek city of Alexandroupolis.