As of 2020, Europe will receive natural gas from the Caspian Sea through the Trans-Adriatic-Pipeline. After some initial difficulties, the project is beginning to take shape. And it will bypass Russia.
The Trans-Adriatic-Pipeline (TAP) is to deliver natural gas from the Caspian Sea in Azerbaijan - via Georgia, Turkey, northern Greece and Albania - to southern Italy to feed into the European gas network.
According to DW, the financing of the southern European gas pipeline seemed initially to be on shaky foundations, after the German energy giant E.ON and French firm Total signaled their intention to withdraw from TAP in February - and then did so at the end of September.
But now another investor has emerged - Enagas, one of Spain's biggest gas suppliers, will take over most of E.ON's shares. TAP's biggest shareholders remain the British energy giant BP, the Norwegian Statoil, and the Azerbaijan's state-owned energy company, Socar, who each own a 20 percent stake.
"Of course we regret that E.ON and Total have pulled out, but every company has to decide whether this investment fits into its portfolio," TAP's commercial director Lutz Landwehr said. But Enagas is a strong alternative that brings real experience to the project, he argued, and the TAP project will emerge stronger from the substitution.
Preparatory investments, for things like access roads, are due in 2015, Landwehr told the "Balkans and the Adriatic Oil and Gas Summit" in Athens on October 1. But the first gas deliveries - from the Azerbaijani Shah Deniz gas field, said to contain a billion cubic meters of gas - are not expected until the beginning of 2020. TAP is supposed to supply up to 20 percent of Europe's demand.
TAP is not only attractive because it offers cost-efficient access to gas reserves in the Caspian region. The participating nations are also hoping to re-position the European energy market. Albania, for instance, has barely had an opportunity to tap into the European energy grids. This will now change, said Albania's deputy energy and industry minister Dorian Ducka. "The TAP project ... makes Albania part of the southern gas corridor," he told DW. "It makes Albania part of the networks of energy, especially in the gas sector."
TAP also makes sound business sense, he claimed, because Albania can expect direct foreign investment of up a billion euros ($1.25 billion), as well as jobs and higher tax revenue.
Competition for Russia
It remains to be seen whether Russia sees TAP as competition for the South-Stream-Pipeline, intended to bring Russian gas around Ukraine through the Black Sea to Bulgaria and western Europe from 2018. Almost all the participants at the Balkans and the Adriatic Oil & Gas Summit denied this.
Thedoros Tsakiris, assistant professor for geo-politics at the University of Nicosia in Cyprus, said the question is irrelevant, since Europe is expected to need an additional 100 billion cubic meters of gas in the next few years, and so will be grateful for any new supply it can get. "South Stream will not increase Europe's dependence on Russian gas imports, and will not conquer any new share of the market, it offers only an alternative route for already agreed gas deals. TAP is not serious competition for that - not least because of its smaller capacity. While South Stream will deliver up to 150 billion cubic meters per year, TAP will provide 20 billion in 2025, at most."
Nabucco Redux?
The Southern Gas Corridor, which is a $50 billion project that encompasses the Trans Anatolian Natural Gas Pipeline (TANAP), TAP and possibly Ionian Adriatic Pipeline (IAP), seems to have a twist that may in fact resurrect the now forgotten Nabucco pipeline project, possibly via the infusion of Iranian gas. In such a case a significant shift of balances and change of corporate plans will occur.
Recently President Hasan Rouhani publicly stated that Iran could assist in the aforementioned plans and assured the Austrian government during his state visit there that amounts up to 25 bcm per annum could be available. It is of interest to note that the diameters of the interconnectors between Iran and Turkey are already in the same size - 56 inches - thus the plan could move forward in a reasonable time frame since additional amounts would not require more than a few more compressors and upgrades of the already existing infrastructure.
