Spain’s Enagás joins TAP pipeline consortium

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The shareholder structure of the Trans-Adriatic Pipeline (TAP) – a major component of the Southern Corridor project that will bring gas from the Caspian region into Europe  - has changed significantly, opening up new possibilities for gas flows within Europe. Leading Spanish transmission company Enagás has joined the consortium, taking a 16% stake, while Belgium’s Fluxys has raised its stake from 16% to 19%.

The new shareholdings have been acquired from two companies that have decided to leave the consortium: Total, which had a 10% stake, and E.ON, which had 9%.  TAP's shareholders are now BP (20%), SOCAR (20%), Statoil (20%), Fluxys (19%), Enagás (16%) and Axpo (5%).

Andy Lane , chairman of the board of directors for TAP, said: “As we prepare for the next crucial stage, starting with the construction of roads and bridges in Albania in early 2015, I would also like to thank both E.ON and Total for their strong commitment and contribution to TAP’s development and welcome Enagás as a new shareholder.”

The TAP  project involves the construction of an 871 km pipeline linking Turkey and Italy and running through Greece and Albania. It will run for 547 km through Greece, 211 km through Albania, 8 km through Italy and 105 km offshore under the Adriatic Sea, with an initial capacity of 10 Bcm/year. In line with the timetable of the Shah Deniz field in the Caspian Sea, first gas deliveries of gas to TAP in Europe are scheduled for around 2019.

Commenting on its decision to enter the TAP consortium, Enagás said: “TAP was included as a Project of Common Interest (PCI) by the European Union in October 2013 and is critical to integrate the European gas market. It is a complementary supply route to the interconnection with France via the Pyrenees (MidCat, also a PCI), which will help Spain to improve the security of supply in Europe.

The European market is one of the key areas of international growth in the Enagás 2013-2015 Strategic Update, making participation in the project a step forward in the company's internationalisation process.

Fluxys, for its part, also has plans for Caspian gas. The company said that to enable gas from Azerbaijan and other sources landing in Italy to be shipped into north-west Europe, it was considering options to create reverse-flow capacity in the Switzerland’s Transitgas pipeline and the TENP pipeline in Germany, both of which it has a stake in (see map).

Map showing infrastructure in which Fluxys holds an interest

Belgium’s Fluxys is planning reverse-flow projects to enable Caspian gas to be shipped to markets in north-western Europe. (Source: Fluxys)

“The reverse flow project (another PCI) will significantly strengthen Europe’s security of supply as well as enhance market liquidity by fully linking the major

gas trading places in Italy, Germany, Belgium and the United Kingdom,” said the company.

The Southern Gas Corridor is one of the most complex gas value chains ever developed. Stretching over 3,500 kilometres, crossing seven countries and involving more than a dozen major energy companies, it consists of several separate energy projects representing a total investment of around $45 billion:

  • the Shah Deniz 2 development, which involves drilling wells and producing gas offshore in the Caspian Sea;
  • expansion of the natural gas processing plant at the Sangachal terminal on the Caspian Sea coast in Azerbaijan;
  • three major pipeline projects: the South Caucasus Pipeline Expansion (SCPX) in  Azerbaijan and Georgia, the TANAP in Turkey and the TAP in Greece, Albania and Italy;
  • expansion of the Italian gas transmission network; and
  • possibilities for further connection to gas networks in south-eastern, central and western Europe.

The routing of the Southern Gas Corridor makes it possible to supply several south-eastern European countries, including Bulgaria, Albania, Bosnia and Herzegovina, Montenegro and Croatia. The landfall in Italy will allow transportation of Caspian natural gas to some of Europe’s largest markets, including Germany, France, the UK, Switzerland and Austria. First gas sales to Georgia and Turkey are targeted for late 2018, with first deliveries to Europe following about a year later.