Page 4 - EurOil Week 46

EurOil COMMENTARY EurOil

Trans-Adriatic gas pipeline

declared ready to operate

The pipeline's completion is a major boon for Azerbaijan, whose economy has come under

significant strain amid low oil prices and broader economic fallout from the pandemic

EUROPE THE Trans-Adriatic Pipeline (TAP), the third Fluxys, Spain’s Enagas and Switzerland’s Axpo.
and final section of the Southern Gas Corridor The pipeline has now “begun commercial oper-
WHAT: (SGS) network designed to bring Azeri gas to ations”, the consortium said in a statement,
The TAP pipeline is now southern Europe, is now ready to start flowing, although a spokesman clarified to NewsBase that
ready to flow Azeri gas its operator has said. this did not mean it was flowing gas.
commercially. The pipeline’s completion is a major boon for “The start of commercial operations means
Azerbaijan, whose economy has come under sig- that TAP is ready to transport gas,” the represent-
WHY: nificant strain this year owing to a collapse in oil ative said in an email. “Any actual gas flows are
The milestone draws a revenues and the broader economic fallout from up to the shippers’ choice, which they exercise
line under four and a half the coronavirus (COVID-19) pandemic. through the daily nomination of the capacity
years of construction. The TAP operating consortium announced they have booked in TAP.”
the milestone on November 15, mere days after Italian buyers have agreed to take 8 bcm per
WHAT NEXT: Azerbaijan scored a major political victory in a year of TAP’s gas, while Greece is set to receive 1
There is uncertainty peace deal with Armenia, ending six weeks of bcm per year. A further 1 bcm will go to consum-
about TAP's future fighting over the disputed Nagorno-Karabakh. ers in Bulgaria following the completion of an
expansion to 20 bcm per Yerevan has ceded some territories to Baku interconnector with Greece, which is anticipated
year, given EU antipathy under the agreement. During the brief con- in the second quarter of 2021. The dominant
towards fossil fuels and flict, Azerbaijan repeatedly accused Armenia of supplier for these markets is Russia.
limits to investment as targeting its oil and gas pipelines and trying to The EU has provided substantial regulatory
a result of the COVID-19 thwart TAP’s launch. and financial support to SGC over the years,
crisis. TAP connects near the Greek-Turkish border given it will enable countries in southern Europe
with the Trans-Anatolian Pipeline (TANAP), to diversify their energy imports. It is unlikely
SGC’s mid-stream pipe that was completed last that the ambitious project would have been real-
year. From there it runs for 878 km across Greece ised without this backing.
and Albania and under the Adriatic Sea, making Construction on the €4.5bn ($5.3bn) TAP
landfall in Italy. Under its first stage, it will pump took four and a half years to complete, with the
up to 10bn cubic metres of gas per year from the pipeline originally due to have started opera-
BP-operated Shah Deniz field off Azerbaijan to tions in early 2020. Delays were earlier caused by
customers in southern Europe. permitting issues in Italy, where there has been
The TAP consortium is led by BP and Azer- a strong backlash to the pipeline from environ-
baijan’s national oil company SOCAR, with mentalists. Construction work this year was also
other members including Italy’s Snam, Belgium’s disrupted by coronavirus-related restrictions.

P4 www. NEWSBASE .com Week 46 19•November•2020