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Gas from Azerbaijan will arrive in Italy through TAP by the end of the year

July 22, 2020


Abstract : COVID has not slowed down the TAP construction sites, the pipeline which will bring the gas of Shah Deniz (Azerbaijan) deposits to Italy.

MILAN, July 21 (Class Editori) – COVID-19 has not slowed down the TAP construction sites, the pipeline which will bring the gas of Shah Deniz (Azerbaijan) deposits to Italy. Luca Schieppati Managing Director of the company in which SNAM holds a shareholding by 20 percent, has confirmed that the works progress is over 96 percent, with Greek and Albanian infrastructures almost concluded and the Italian part nearing completion.

"We will be active by the fourth quarter of the year", the Manager stated by showing the arrival times in Italy of the first gas supplies coming from Shah Deniz deposits. There is a lot of expectation about the market response by the TAP AG consortium shareholders, which, apart from SNAM, is held by BP and Socar (20 percent each), Fluxys (19 percent), Enagás (16 percent) and Axpo (5 percent). The TAP will be articulated for 878 km, in order to be connected with TANAP (Trans Anatolian Pipeline) in Kipoi, on the Greek-Turkish border, passing through Greece, Albania and Adriatic before reaching Apulia.

It has been postponed by six months, instead, to July 2021, the decision of doubling TAP capacity. Firstly, the consortium which develops the gas pipeline decided to try to anticipate times, and for this reason the submission of binding offers by the operators interested in buying the gas additional aggregates should have had to take place in January 2021.

Market tests were launched in Summer 2019, with the aim of exploring the interest of possible purchasers of the transmission capacity (shipper) as Enel and Edison, but also Axpo Trading, Bulgargaz Ead, Depa Public Gas Corporation of Greece, E. On Global Commodities, Engie, Hera Trading and Shell Energy Europe.

However, COVID-19 has spread and with the commodity price down at its lowest and the energy companies forced to cut CAPEX, the decision taken was not to take risky steps, and adjust to the initial roadmap, according to the maximum timings provided for by laws. "We have decided to rely on the initial roadmap and collect the binding offers in July of next year, in order to meet operators' needs", the managing director of TAP, Luca Schieppati, has explained to MF-Milano Finanza.

"We are ready for different scenarios and for this reason also an intermediate step has been forecasted, without directly reaching the capacity doubling of 20 billion cubic meters from the 10 billion projected for the initial phase." The TAP, therefore, could give rise to a partial expansion, around 15-16 billion of cubic meters. From a technical point of view, the capacity doubling does not represent a problem. In order to reach the doubling, the establishment of two new compressor stations in Albania and Greece will be needed, with the aim of increasing the gas push in the pipelines; in order to reach a partial expansion, instead, the enlargement of the already existing plants could be enough.

"The Market Test guidelines have been approved by the regulators in Italy, Albania and Greece, by involving in the process SNAM and the Greek DESFA, interconnected operators. We will explore the availability of operators about the capacity, in a moment when the market situation will be certainly clearer". COVID-19, however, has not slowed down the TAP construction sites.

(Source:Class Editori)

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Keyword: Italy-Azerbaijan gas transmission

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