Page 13 - FSUOGM Week 50 2022

FSUOGM NEWS IN BRIEF FSUOGM
to complete the first stage of increasing energy electric motors instead of gas
the capacity of the Trans-Adriatic Gas turbines," he added.
The sale of Lukoil’s Italian ISAB Pipeline (TAP) by 2025, according to Luca capacity of the TAP gas pipeline will be
Schieppati has previously said that the
Schieppati, managing director of pipeline
refinery in Italy for $1.5bn is company TAP AG, who spoke to the Italian expanded to 20 bcm of gas by the end of
newspaper Il Sole 24 Or.
2027 without laying new pipes and without
close to completion window is planned to open, during which the need for new work in Italy, only through
"From January 16 to 22, 2023, a market
the installation of new compressors in
The sale of Lukoil’s Italian ISAB operators will be able to request long-term Greece and Albania.
refinery in Italy for $1.5bn may be close to transport capacity. We tried to expedite this The supply of Azerbaijani gas to Europe
completion, reports Reuters on December 9. process as much as possible by rescheduling via the TAP gas pipeline (part of the SGC-IF
A potential buyer is Crossbridge Energy this mandatory stage, originally scheduled system) to consumers in Italy, Greece and
Partners of the US, with which Lukoil had for July 2023," Schieppati said. Bulgaria began on December 31, 2020. The
been in negotiations for such a sale earlier At the same time, he added that if the gas pipeline is designed to transport 10 bcm
in the year. additional capacities requested during of natural gas per year from the Shah Deniz
“This would be unambiguous good the mandatory market tests in January field as part of Stage 2 of its development
news,” BCS GM said in a note. “The ISAB by shippers amount to up to 2.5 bcm of to Europe. The throughput capacity of the
plant proved itself to be extremely useful gas, then TAP AG may start investing gas pipeline makes it possible to double its
to Lukoil in 2022. As the company was in the modernisation of infrastructure capacity up to 20 bcm per year.
able to export 150,000-200,000 [barrels after completing the audit of economic According to TAP AG, the volume of
per day] bpd of Urals crude to the plant sustainability. "With this first step, we will Azerbaijani gas exported to Europe via the
and then realise the resulting products at be able to make available 50% of that 2.5 Trans-Adriatic Gas Pipeline (TAP) since
full European prices, Lukoil was able to bcm by 2025, then complete the second December 31, 2020, amounted to 18.5 bcm,
avoid having to take the $20-$40 per barrel phase in 2026. However, to achieve the of which almost 16 bcm came from Italy.
discount to Brent that Urals has traded goal, full coordination between TAP and Earlier, Azerbaijan exported 19 bcm of gas
at since March. For example, an avoided all operators is necessary, i.e. the decision in 2021. At the same time, from December
$20/bbl discount on 150,000 bpd is the to modernise the pipeline will require full 31, 2020, deliveries to Europe began for the
equivalent of $45mn/month of higher synchronisation between gas demand, first time - to Italy, Greece and Bulgaria -
revenues vs. selling the crude directly.” gas production and the construction of the volume of which in 2021 amounted to
The EU embargo on the export of transport infrastructure," Schieppati said. 8.2 bcm, of which 6.8 bcm was to Italy.
Russian oil to Europe came into force He also added that the deadline for In 2022, the volume of exports is
on December 5 and has changed things doubling TAP's capacity to 20 bcm is projected to be 22-23 bcm, including 11.5
and prevents Lukoil from continuing this 2027. "The doubling of TAP is in line with bcm to Europe.
arrangement. the RepowerEU plan, which included the
Lukoil can no longer send Urals crude southern gas corridor among the decisions
to Sicily, and other sanctions effectively to replace Russian gas, and with the Ukraine will enter the
prohibit it from importing crude from other memorandum of understanding signed in
countries to the plant. mid-July by the Azerbaijani government underground gas storage
Italy, facing the possibility of having 20% and the European Commission," he added.
of its refining capacity shut down, has been Referring to the financing of the work to (UGS) market in the
looking at the possibility of ‘temporarily’ double the capacity of the TAP gas pipeline,
nationalising the plant to keep it running Schieppati said that the European Bank for European Union, Ukraine
under outside management. Reconstruction and Development (EBRD)
“For Lukoil a sale to Crossbridge at this could finance 75% of the total investment Business News reported on
moment would be ideal, with the proceeds (€1.2bn-1.3bn). "The EBRD is ready to
boosting the company’s ability to execute its support us if the expansion project meets December 15.
planned redemption of foreign debt while the requirements for energy security as well
affecting dividend payouts less,” BCS GM as the transition to green energy," he said. Following the implementation of two
said. He added that TAP AG aims to become decisions and the adoption of the EU
Previously Italy approved temporary an operator that sees TAP expansion as draft law no.8158, Ukrtransgaz, Ukraine’s
nationalisation of the ISAB refinery on the only way to decarbonise infrastructure gas transportation system operator, will
the island of Sicily as part of the country’s and allow it to transport low-carbon gases be certified to operate in the EU and be
Council of Ministers decree to protect (from biomethane to hydrogen). "For this officially recognised as compliant with
strategic enterprises. reason, we have started preliminary studies EU regulations. The National Energy
Even if Lukoil had been able to keep the that confirm the possibility of transporting Regulatory Commission also backed
plant and run it off alternative, non-Russian up to 10% hydrogen through TAP with Ukrtransgaz’s certification.
crude flows, typical European refining minor modifications, and we are testing, As such, Ukraine will be able to use its
margins would imply annual EBITDA among other things, in a laboratory in vast UGS facilities, the largest in Europe,
contributions of perhaps $0.3bn, vs. typical the Netherlands, the compatibility of our to store commercial gas reserves belonging
annual EBITDA of around $15bn, or only steel and TAP welds with 100% hydrogen to European companies as well as strategic
2% of the total. transport," he said. reserves previously collected at the state
According to him, the company has level.
also prepared a special plan to reduce
TAP may complete Phase I of greenhouse gas emissions by 6% over three
years. "We are reducing fugitive emissions
gas pipeline expansion by 2025 and are also exploring the possibility of
connecting compressor stations to very
Pipeline company TAP AG is ready high voltage networks and installing green

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