Last update: March 25, 2023 23:58

Newsroom logo

TAP May Affect Prices In European Gas Market

By Gunay Hajiyeva December 13, 2018


Aerial view of TAP routing / Tap-ag.Com

While the multi-national Trans Adriatic Pipeline (TAP) consortium is busy with building the Trans Adriatic Pipeline to transport Azerbaijani gas to Europe, its country manager in Albania commented on the possible effects of the introduction of Caspian Sea gas in the European market.

TAP Country Manager for Albania Ad Interim, Michele Mario Elia, said in a statement issued on Tuesday that TAP may have a positive effect on the European gas market, making the fuel cheaper for consumers.

“This is a simple law of economics: if there is only one tomato seller in the market, prices are determined by him,” Elia said according to Trend. “But if another seller enters the market and offers a more competitive price, it’s good for the consumer.”

Stretching 878 kilometers in length, the Trans Adriatic Pipeline is the final segment of the 3,500-kilometer Southern Gas Corridor (SGC) mega gas project. Connecting to the corridor’s middle portion, known as the Trans Anatolian Pipeline (TANAP) at the Greek-Turkish border, TAP will cross Northern Greece, Albania and the Adriatic Sea before reaching the final destination in southern Italy to connect to the Italian gas grid.

Construction of TAP began in 2016, and the project costs $4.5 billion. By 2020, it will be completed and gas from the Caspian Sea, via Azerbaijan, will reach western Europe. As of November, approximately 82 percent of TAP has been completed. BP, Azerbaijan’s state-run energy company SOCAR, and Italy’s Snam each have a 20 percent stake in TAP, while Belgium’s Fluxys has 19, Spain’s Enagás has 16, and Switzerland’s Axpo has five percent.

The direct and cost-effective gas transportation corridor will carry 10 billion cubic meters of natural gas to Europe annually and power approximately 10 million homes. It will create the first direct gas value chain between Europe and the Caspian Sea region.

TAP’s routing offers a unique solution to facilitate gas supplies to several southeastern European countries, including Bulgaria, Albania, Bosnia and Herzegovina, Montenegro and Croatia, amongst others. The final destination of the pipeline in Italy opens up multiple opportunities for Caspian gas to make inroads into some of the heavyweight European markets such as Germany, France, the U.K., Switzerland and Austria.

The U.K.’s Petrofac Engineering & Production Services East division has signed a 13-month contract with TAP developers for providing operations and maintenance support services for both developing and operating the route. The services are comprised of the provision of specialist personnel to support the project with operations and maintenance, technical services, environmental and safety requirements, along with transition plans through to operations.

“We look forward to working with the TAP team as this important project progresses through construction and towards operational readiness,” Mani Rajapathy, Petrofac’s Managing Director for the Eastern Hemisphere said, according to the company’s official website.

“Petrofac has a significant track record in delivering operations and maintenance support services to major oil and gas operators, through our strong reputation for delivery, high technical standards and health, safety and environmental excellence.”