TAP, on time and budget, now one year into development

Construction work on the the Trans Adriatic Pipeline (TAP), one of Europe’s largest and most strategic energy (natural gas) infrastructure projects, marks its first anniversary tomorrow, while activity in each of the project’s three host countries is on time, on track and on budget, the TAP consortium has announced in a statement.

The TAP project will transport natural gas from the giant Shah Deniz II field in Azerbaijan to Europe. The approximately 878 km long pipeline will connect with the Trans Anatolian Pipeline (TANAP) at the Turkish-Greek border at Kipoi, cross Greece and Albania and the Adriatic Sea, before coming ashore in Southern Italy. 

“We are pleased with our performance. In terms of overall project progress, we are approximately 41% complete, including all engineering, procurement and construction scope. We are on track to deliver first gas from Shah Deniz II in 2020, becoming an active part of the European energy network, enabling more competitive and secure energy to reach homes and businesses,” noted TAP Managing Director Ian Bradshaw. “I am particularly pleased that today, approximately 173km of welded steel pipes – around 21 times our project length in Italy – have been put in the ground in Greece and Albania. TAP remains fully committed to reinstate land to its original condition or better. A project of this scale and magnitude will face daily challenges, however, we are well positioned to address and manage them by working closely with our teams, our supply network and alongside communities.” Bradshaw added.

TAP’s routing can facilitate gas supply to several South Eastern European countries, including Bulgaria, Albania, Bosnia and Herzegovina, Montenegro, Croatia and others. TAP’s landfall in Italy provides multiple opportunities for further transport of Caspian natural gas to some of the largest European markets such as Germany, France, the UK, Switzerland and Austria.

TAP will promote economic development and job creation along the pipeline route and will also be a major source of foreign direct investment, the consortium noted in its statement. First gas sales to Georgia and Turkey are targeted for late 2018 and first deliveries to Europe will follow around early 2020, the statement added.

TAP’s shareholding is comprised of BP (20%), SOCAR (20%), Snam (20%), Fluxys (19%), Enagás (16%) and Axpo (5%).

The TAP consortium, providing a list of its achievements over the past year in its statement, noted: the project has a world class site safety record with lost time frequency levels well below international norms; TAP’s contractors cleared approximately 49% of the project route in Greece and Albania (371km out of 765km); 22.6% of welded steel pipes are already in the ground (backfilled); in Italy, work is ongoing with the first batch of olive trees temporarily stored, so that construction of the 1.5km micro-tunnel can start later in the year; 68.5% of the total 55,000 pipes to be used for the construction of the pipeline have been received in Greece, Albania and Italy; more than 5,200 people have been working for the project across TAP’s host countries, over 85% of which have been employed locally; TAP implemented a wide range of social and environmental investment (SEI) programs in the communities along its route; and 70 additional projects with a total value of approximately €15 million are due to be rolled out in the upcoming months for total SEI investments by TAP of over €55 million in Greece, Albania and Italy.



Turkish unrest boosts local gas storage, LNG station prospects

Last week’s attempted coup in Turkey, the three-month state of emergency just declared by the neighboring country’s president Recep Tayyip Erdogan, the polarization of citizens, and, above all, the overwhelming fear that Turkey is entering a period of prolonged unrest amid which an eventual outbreak of civil war cannot be ruled out, are all new factors reshaping plans for the region’s energy projects.

Energy-sector players with interests have already recognized the arrival of a new era for the region and are rethinking and revising their plans accordingly, regardless of whether they are openly admitting so or not.

For example, Russia is now displaying a revived interest for the development of a stalled oil pipeline to link Burgas, on the Bulgarian Black Sea coast, with Alexandroupoli, in Greece’s northeast. The pipeline would bypass the Bosporus and Dardanelles and offer an alternative route for the delivery of Russian and Caspian oil should any shipping limitations arise in the Black Sea straits, as Nikolay Tokarev, president of the Russian pipeline company Transneft, put it just days ago.

The prospects for the Trans Anatolian Pipeline (TANAP), a major pipeline planned to transfer natural gas from the Azeri deposit Shah Deniz across the Georgian-Turkish borders, in Turkey’s west, are suddenly not as bright as a result of the latest political turmoil in Turkey. This pipeline, if completed, would transport natural gas to the Greek-Turkish border and, from there, continue via the TAP (Trans Adriatic Pipeline) across to Italy.

Yesterday, the consortium behind the TANAP project rushed to assure that Turkey’s political developments will not affect the pipeline’s progress, noting that the pipeline’s construction remains on schedule. However, it is quite obvious that a 1,800-kilometer pipeline crossing a country mired in major political uncertainty represents a business venture whose current risk greatly exceeds the level originally anticipated. Without a doubt, within this context, the consortium will reassess its plans.

The prospects of other projects have gained ground as a result of the situation in Turkey. These include a planned floating LNG station in Alexandroupoli, as well as an underground natural gas storage facility at a depleted deposit in the Gulf of Kavala, northern Greece.

Development of the Alexandroupoli’s floating LNG station, if the required capital and entrepreneurial participation are secured, promises to establish the facility as a safe supply point for the TAP pipeline, if the TANAP project is delayed or rerouted. The Alexandroupoli LNG station also promises to support the planned Greek-Bulgarian IGB interconnector.

During a recent meeting in Athens with Greece’s energy minister Panos Skourletis, officials of US energy company Cheniere, primarily active in LNG-related businesses, declared, clearer than ever before, the company’s interest to take part in the development of the Alexandroupoli LNG station.

Gastrade, a Copelouzos corporate group company and fundemantal proponent behind the investment plan for the Alexandroupoli station, plans to have finalized an investment plan and capacity commitments from traders by the end of the year. The objective is to complete the LNG station’s construction by the end of 2018.