Construction work on the TAP (Trans Adriatic Pipeline) project, the largest foreign investment to be made in Greece over the past few years, valued at over 1.5 billion euros, is expected to begin next April, consortium officials believe.
Private capital is being provided by the TAP consortium’s six energy giants for the pipeline project’s construction, to supply Azeri natural gas through northern Greece, Albania, and across the Adriatic Sea to Italy, linking the country’s gas infrastructure with central Europe.
BP, Azerbaijan’s Socar, and Norway’s Statoil each hold 20 percent stakes in the consortium, Belgium’s Fluxys is represented with a 19 percent share, Spain’s Enagas has 16 percent, and Swiss company Axpo holds a five percent stake.
Tenders for the project’s construction and supply of pipelines are currently in progress. German steel and technology group Mannesmann has already secured one of the project’s local contracts.
Greek construction and industrial groups that have submitted bids are optimistic of securing contracts, believing they have submitted extremely competitive offers. Participating local pipeline producers, such as Corinth Pipeworks, hold a considerable advantage over foreign competitors for the TAP project’s supply of pipelines as a result of their geographical proximity and the significantly lower transportation costs entailed.
Certain regional licensing issues still need to be resolved before the TAP consortium is given the green light for construction work to begin. Even so, all sides involved in the project, including Greece’s energy ministry, expect the ongoing negotiations will conclude favorably and allow work to commence.
Meanwhile, the region’s rival pipeline project being promoted by Russia to cover southeast Europe, dubbed “Turkish Stream”, has run into problems as a result of objections raised by Turkey over the project’s Turkish segment, whose capacity and natural gas amounts to be carried have already been downsized. A next round of talks between Russian and Turkish officials, now at a standstill, are expected early in 2016.
The US Energy Information Administration (EIA) recently characterized the project’s prospects as uncertain, despite a political agreement already reached between Russia and Turkey, whose intentions for the project are currently unclear. The US, aiming to lessen Europe’s dependence on Russian natural gas, has not embraced the “Turkish Stream” proposal. The EU appears to have hesitantly backed the US position.