August 2017, Vol. 244, No. 8
Features
Trans-Adriatic Gas Pipeline Expected to Fill Big Void
Construction recently passed the one-year mark on the $45 billion mega-project, Trans Adriatic Pipeline (TAP), designed to fill the gap in Europe’s Southern Gas Corridor project to access gas from fields in Central Asia. The pipeline is one of Europe’s largest and most strategic natural gas infrastructure projects. It will connect customers in Italy and the Balkans with the Azeri gas fields of the Caspian Sea.
When completed, TAP will transport natural gas from the giant Shah Deniz II field in Azerbaijan to Europe through a 544-mile (878-km) pipeline, connecting with the Trans Anatolian Pipeline (TANAP) at the Turkish-Greek border at Kipoi. Then it will cross Greece and Albania and the Adriatic Sea before coming ashore in Southern Italy. TANAP crosses Turkey, Georgia and Azerbaijan and will provide an interconnector between Greece and Bulgaria.
TAP’s initial capacity of 10 Bcm/y could be doubled, too, when gas output in the wider Caspian region is increased. This would involve adding two more compressor stations, reported Euroactive independent news.
Table 1: TAP key facts and figures
| Length | About 878 km
|
| Capacity | 10 Bcm/y: Enough gas to supply 7 million households.
Diameter: 48 inch (1.2 m) onshore; 36 inch (0.91 m) offshore. Base case: Two compressor stations (one in Kipoi, Greece, and one in Fier, Albania) and built-in physical reverse flow. Expanded case: Over 20 Bcm/y capacity by installing two additional compressor stations, one in Serres, Greece, and one in Bilisht, Albania. |
| Connectivity | Infrastructure TAP will connect to TANAP (Trans Anatolian Pipeline), SNAM in Italy, and could connect with the Interconnector Greece-Bulgaria (IBG) and Ionian Adriatic Pipeline (IAP). |
| Technical data | 54,387 pipes
The weight of steel pipes is 516,184 tons (71 Eiffel towers) The overall trench excavation volume is 4,545,000 m3 (almost twice the volume of the Cheops pyramid in Egypt) |
| Timeline | May 2016 – start of pipeline construction and above ground installations
Winter 2017-18 – offshore pipeline construction 2019 (end) – construction and commissioning completed 2020 – first gas, TAP starts operations |
| Equity finance:
Funding from: |
BP (British) (20%), SOCAR (Azerbaijan) (20%), Snam (Italian) (20%), Fluxys (Belgium) (19%), Enagás (Spanish) (16%) and Axpo (Swiss) (5%)
EBRD; European Investment Bank, EU and export-credit agencies |
Source: Trans Adriatic Pipeline
TAP begins at the Turkish-Greek border, then runs west through the plains of Thrace and across the mountains of Macedonia to enter Albania. It reaches its highest point of 1,800 meters in Albania and enters the Adriatic coast at Flier, where it crosses the Adriatic on the seabed, plunging to its lowest depth of 820 meters before coming ashore at San Foca, near the southern Italian port town of Brindisi.
In Italy, TAP will transport 8 Bcm/y into the national gas grid for the domestic market, as well as delivering further afield to Austria, southern Germany and Switzerland. On completion, TAP will be 870 km in length, with the onshore section of 544 km supplied with 48-inch pipes and 36-inch pipes offshore. The pipeline is expected to have a lifespan of 50 years.
A 8.5-Bcm storage facility in Albania will be an ancillary development of TAP. It will be equipped with reverse flow to underpin creation of a national gas grid and will provide additional energy security for southeastern Europe, according to Natural Gas World.
TAP investors expect the project to cost €5.7 billion ($6.3 billion). The gas supplier, the Shah Deniz consortium, has signed a 25-year sales agreement with eight European companies to supply 10 Bcm/y of which 8 Bcm/y will be transported to Italy. The remaining 2 Bcm/y will be divided equally between Greece and Bulgaria.
Table 2: Contracts awarded
Source: Trans Adriatic Pipeline
Construction Challenges
The builders of TAP are confronted by conventional and unconventional challenges in Albania, Greece and Italy. In Albania, the peak elevation of 1,800 meters is itself a challenge while the inadequate local road network had to be upgraded to carry heavy machinery and equipment, including a 60-ton pipe-bending machine and over 1,000 18-meter pipes weighing up to 16 tons. Geo-hazards, such as landslides, most notably at the site of the Fier compressor station, along with marshy conditions requiring over 4,000 stone piles, some of which are 15 meters deep, added to the difficulties.
In Greece and Albania, archaeological finds of tile, pottery, graves and a 40-cm limestone column found in Skrapari and dating to the 6th century A.D., have slowed progress. In Italy, clearing unexploded ordinance is perhaps not that unusual but they are also spraying, removing and replanting 2,000 mature olive trees to make way for construction of the 0.9-mile (1.5-km) micro-tunnel later in the year.
Benefits for Greece
Greece is totally reliant on imports of natural gas, 60% of which is supplied by Gazprom, with the remaining 40% arriving by tanker as LNG from Algeria, Qatar and Nigeria, and by pipeline from Turkey.
With rising demand for gas, imports increased from 2.4 Bcm/y in 2003 to 3.6 Bcm/y in 2013, according to the E.U.’s statistical arm, Eurostat. TAP will help satisfy rising demand and boost economic development. Greece’s Foundation for Economic and Industrial Research (IOBE says TAP will generate €33-36 billion for the Greek economy during its lifespan.
In the short term, construction of TAP and its accessories will create 8,000-10,000 jobs. Moreover, Greece could become an energy hub with a connection to Hungary’s TAP via a proposed Greece-Bulgaria-Romania Interconnector.
Benefits for Albania, Balkan
Hydropower supplies 90% of Albania’s electricity. When Albania is connected to TAP, the Ministry of Energy expects demand for gas to grow from nearly nothing to 1.8 Bcm/y, brought on by investment in a nationwide gas distribution network.
In addition, a new 516-km gas pipeline, the Ionic Adriatic, linking the neighboring Balkan states of Bosnia and Herzegovina, Serbia, Kosovo, Montenegro and Croatia with TAP in Albania, will reduce those countries’ dependence on Russian gas and complete a gas pipeline ring around the Adriatic Sea.
According to estimates by Oxford Economics, the construction activities will provide €157 million to Albanian gross domestic product (GDP). The operational effects of the project will add €780 million to the GDP.
Benefits for Italy
Natural gas meets 34% of Italy’s total energy consumption, and imports of 61.4 Bcm/y supply 90% of Italy’s gas needs, according to Eurostat. Italy imports 43% of its gas from Russia via Ukraine. Its second-largest supplier, Algeria, sends gas to Italy via Tunisia.
Social and economic instability threaten these supplies both now and in the future. Since Italy’s consumption of natural gas is expected to rise from 61.4 Bcm/y in 2015 to 73 Bcm/y in 2023, additional import capacity is required. An additional silver lining arising from TAP is that it should increase competition for market leader Eni, which has an 83% share of the wholesale market. This should help reduce domestic gas prices.
With TAP’s completion, Italy’s ambitions as an energy hub will be strengthened because the country will be at the crossroads of gas pipelines from Algeria, the North Sea, Russia and Central Asia.
Overall, TAP will provide new sources and volumes of gas along new routes to southern Europe and the Balkans, increasing energy sector competition, boosting cross-border supplies and reducing southern Europe’s dependence on Russian gas.
TAP is also expected to promote economic development and job creation along the pipeline route as well as being a major source of foreign direct investment. With first gas sales to Georgia and Turkey targeted for late 2018, first deliveries to Europe will follow by early 2020, according to the developers.
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