TAP "satisfied" with tests on expansion
The Trans Adriatic pipeline (TAP) operating company is satisfied with the results of non-binding market tests for a planned expansion of the pipe's capacity, it told NGW on September 3.
TAP launched the tests in early July, allowing shippers to make non-binding bids for long-term capacity. These bids could then progress into binding contracts that would help finance the pipeline's expansion.
TAP forms the European section of Southern Gas Corridor (SGC) and is set to pump Azeri gas through Albania and Greece and finally to Italy. Under its first phase, scheduled for completion next year, the pipeline will have a 10bn m3/yr capacity. A second phase is planned that will raise this to 20bn m3/yr.
An Azeri government source told NGW that the expansion would not be completed before 2024, due to the “various works and preparations” required beforehand. This primarily involves finding suppliers and clients to make use of the extra capacity.
“We are pleased with the interest for capacity expressed in the non-binding phase of the market test,” TAP told NGW. “TAP will proceed with the subsequent phases of the market test, in line with the Guidelines for the 2019 Market Test of Trans Adriatic Pipeline, approved by the national regulatory authorities of Greece, Italy and Albania.”
The company did not disclose the names of companies or countries that would potentially provide the extra gas. But an Azeri official confirmed to NGW that Azeri gas would help utilise the added capacity. The source explained that companies and consortia that took part in the tender could not be identified as per the terms of the contest.
TAP's first-phase capacity will be used to flow gas from the BP-led Shah Deniz stage 2 project. But the second-stage capacity could be used by other projects, including the Total-led Absheron gas field.
TAP’s shareholders are BP (20%), Azerbaijan's state-run Socar (20%), Italy's Snam (20%), Belgium's Fluxys (19%), Spain's Enagas (16%) and Swiss-based Axpo (5%).
According to official documents, the first phase of TAP is estimated to cost €4.5bn ($4.9bn), but the expansion would only require a little more than €1bn. The project's consortium noted to NGW, however, “before confirming any figures for any future potential expansion, TAP will analyse the expressed demand. Following this, the relevant tendering processes and technical design need to be completed. Further details regarding the capacity expansion cost and timing will only be available once these phases have been concluded”.
TAP's first-phase alone was initially anticipated to cost €6bn. If the €1bn sum for the second phase proves realistic, the cost of both stages together is now estimated at only €5.5bn.
Development of the first phase continues on schedule, according to TAP, with 88.8% of the pipeline complete at the end of July in terms of engineering, procurement and construction .
“As of end-July, between Greece, Albania and Italy, around 99% pipes are already in the ground (back-filled). Reinstatement along the route is more than 96% complete,” the project operator said.
TAP added that the micro-tunnel in Melendugno in Italy had been completed without any impact or interference with local tourist activities and the environment along the coast. Work on the Italian section of the pipeline and its receiving terminal is running on schedule, it said.
“Also, thus far, we have worked more than 43 million man-hours and driven over 123 million kilometres without any major accidents and with frequency rates being in line with best industry levels,” TAP said, referring to progress at the end of July.