Caspian Report - Issue 06 - Winter 2014

meter long pipeline with an annual
capacity of 10 bcm which will hook up
to TANAP on the Turkish-Greek border
and will extend to southern Italy
via a route crossing Greece, Albania
and the Adriatic Sea. The pipeline can
easily be expanded to carry 20 bcm. It
has a built-in physical reverse-flow option
of 8 bcm to enable gas to be transported
westwards as well, in cases of
emergency. The pipeline could utilize
potential gas storage facilities in Albania.
The aim is to commence pipeline
construction in 2015 in order for TAP
to be ready to receive gas from Shah
Deniz via the SCP and TANAP in 2019.
Critics of TAP have pointed out that the
project will supply gas to the already
saturated market in Italy. However, the
promoters of TAP countered that they
intended to effectively extend the SGC
by connecting the pipeline to other
customers in northern, Central and
Eastern Europe. There are plans to
link TAP with consumers in northern
Italy through the Snam Rete network
and from there to the pipeline systems
in Switzerland, Austria, Germany, Belgium
and the UK. Axpo, a Swiss member
of the TAP consortium, owns gasfired
plants in northern Italy, while
another consortium partner, Fluxys,
operates several pipeline networks in
northern Europe. 3 The shareholders of
TAP have set up a joint working group
with the backers of the proposed
Ionian-Adriatic Pipeline (IAP). This
group is considering plans to connect
TAP with the IAP to provide gas to customers
in Montenegro, Bosnia-Herzegovina,
and Croatia. In turn, the TAP-
IAP network could link up with the
EU-backed West Balkan Ring to feed
gas to other consumers in Slovenia,
Macedonia and Kosovo. The Bulgarian
market will also be tapped by planned
pipeline interconnectors from Greece
as well as from Turkey.
BECAUSE OF THE SHORTER DISTANCE INVOLVED,
LOWER TRANSIT TARIFFS, AND THE HIGHER PRICE THAT
CUSTOMERS IN GREECE AND ITALY WERE WILLING TO PAY,
TAP WAS EVENTUALLY SELECTED BY THE SHAH DENIZ
CONSORTIUM IN JUNE 2013.
Most of these projects are still on the
drawing board and will not be realized
in the immediate future, with the exception
of the interconnectors to Bulgaria
which will carry small volumes.
Nevertheless, the final investment
decision for the expansion of work at
Shah Deniz has given added momentum
to companies involved in both the
TAP and TANAP projects.
THE ROLE OF TURKEY
Because of its geographical location,
Turkey is a crucial component
of the SGC. Turkish Petroleum has a
stake in the SCP and policy-makers
in Ankara are lobbying to increase
Turkey’s share in TANAP and to become
a partner in the TAP project.
BOTAS was reportedly offered a 15
percent stake in TAP in 2011. With
seven companies now participating
in the TAP project, it may be difficult
for BOTAS or Turkish Petroleum to
belatedly acquire a stake.
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CASPIAN REPORT, WINTER 2014
3
. The stakes of other consortium members working at Shah Deniz and in the development of
the SCP are as follows: Total, 10 percent; Lukoil, 10 percent; Naftiran Intertrade Company, 10
percent: and Turkish Petroleum, 9 percent.