Page 8 - MEOG Week 30 2021

MEOG PIPELINES & TRANSPORT MEOG

Israel freezes RED MED pipe deal

ISRAEL/UAE ISRAEL’S Ministry of Environmental Protection crude oil and oil-related products from the Red
this week announced that it was delaying the Sea to the Mediterranean without traversing
development of an oil transmission project that either the Suez Canal the or Strait of Hormuz,
will pipe Emirati oil from the Red Sea directly to providing that the crude was exported from the
the Mediterranean. eastern emirate of Fujairah. RED MED is jointly
The pipeline’s backers had submitted an envi- owned by Petromal, part of Abu Dhabi-based
ronmental risk assessment in response to a chal- National Holding, Israeli company AF Entre-
lenge by parties concerned that the project would preneurship, and international infrastructure
heighten the risk of an oil spill. and energy company Lubber Line.
Despite claiming the risk from increased Given the accession to the job of environ-
crude flows was minute, the Europe Asia Pipe- mental protection minister of the Meretz Party’s
line Co. (EAPC) – formerly Eilat Ashkelon Pipe- Tamar Zandberg, a vocal critic of the proposed
line Co. – was informed by the ministry that the pipeline, the decision to freeze the deal is
report “did not meet the [ministry’s] conditions”, unsurprising.
adding that it was “delaying the evaluation of Meanwhile, the office of newly appointed
your preparations to increase activity in the Eilat Prime Minister Naftali Bennett said that it had
port, until the government has a discussion and “asked the court for an extension of time, in order
reaches a decision” on the development. to respond to the petition filed by the environ-
The new old pipeline, first built in the 1960s mental organisations”.
to transport Iranian oil to Israel, is being repur- Eilat had previously been considered as the
posed by its new owner the EAPC to help RED location of a potential floating LNG (FLNG)
MED Land Bridge Co., a joint venture between facility but was discounted on environmental
Israel and the UAE, to transport UAE-origin grounds.™

No binding for additional TAP capacity

TURKEY NO binding bids were lodged for additional TAP said it offered three expansion scenarios:
capacity in the 10bn cubic metre (bcm) per year a limited expansion to 14.4bcm per year, a partial
Trans Adriatic Pipeline (TAP) that brings gas expansion to 17.1bcm per year and a full expan-
from Azerbaijan via Georgia, Turkey, Greece sion to 20bcm per year. The earliest a capacity
and Albania to Europe, the operator announced expansion for the pipeline, which makes landfall
on July 22. in southern Italy, could have been realised was
As part of the binding phase of TAP’s capacity October 2026.
expansion market test, an invitation for bids to Platts Analytics said it had been skeptical on
be submitted from July 17-20 was sent out. TAP’s expansion for a while given declining gas-
TAP, which was opened as the final segment for-power demand, an already reduced depend-
of interconnected pipelines that make up the ence on Russian gas due to the current TAP
Southern Gas Corridor (SGC), has been cele- capacity, as well as the expansion of the Passo
brated by the EU as providing effective diver- Gries interconnection point on the border with
sification away from over-reliance on Russian Switzerland.
gas. The result of the market test might pose “It is also understood that Turkey’s vision of
questions as to the level of future European gas increased domestic gas production is limiting its
demand and the necessity of securing additional appetite for longer-term import commitments,
import capacity. reducing the need for further TANAP per TAP
“We weren’t assuming any expansion of TAP expansions,” it said.
in our long-term forecast so this certainly sup- Despite the lack of binding bids, non-binding
ports that view,” S&P Global Platts Analytics’ capacity and connection requests can be submit-
managing analyst James Huckstepp said. ted up to September 6 as part of the new market
“Despite prompt prices holding up close to test, TAP said.
all-time highs the curve is extremely backwar- TAP’s shareholders are BP (20%), Azerbai-
dated, which likely reflects pessimism around jan’s Socar (20%), Italy’s Snam (20%), Belgium’s
longer-term demand prospects,” Huckstepp Fluxys (19%), Spain’s Enagas (16%) and trader
said. Axpo (5%).™

P8 www. NEWSBASE .com Week 30 28•July•2021