Trans-Adriatic project may include LNG terminal

Wednesday, 13 February 2008

The pipeline will open a new corridor and market outlet for natural gas from Azerbaijan’s part of the Caspian Sea into Europe, said StatoilHydro.

The 520-kilometre long pipeline will transport gas via Greece and Albania and across the Adriatic Sea to Italy’s southern Puglia region and further into Western Europe.

The project also includes the option to develop natural gas storage facilities and an LNG terminal, which in turn would further contribute to increasing the security of supply in southeast Europe, said StatoilHydro, which is the second-largest gas supplier to Europe after Russia’s Gazprom.

TAP’s offshore length will measure about 115 kilometres. In its upstream part, TAP will interconnect with Greece's existing pipeline system that is linked further to the east with systems in Turkey, the company said.

TAP is currently in the front-end engineering stage. The feasibility study was concluded   in March 2006 by EGL, which is an energy trading company with its own power assets.

TAP's extended basic engineering, including the Environmental Impact Assessment, was concluded in March 2007, and included the offshore survey for the pipeline, which was carried out in 2006.

The gas transport capacity of the pipeline will be around 10 billion cubic metres annually, with the option to expand to 20 billion cubic metres. TAP is expected to be operational at the earliest from 2011, depending on the gas shipment needs.

Implementation of the TAP project is subject to a final investment decision planned for the second half of 2009.

EGL, which started the project, estimates it will cost $2.2 billion to build the pipeline. The final cost will depend on several factors at the time of construction, such as international steel prices and other pipeline equipment-related costs, StatoilHydro said.

The TAP project is in its development phase supported by the European Union as a “Priority Project” under its Trans-European Energy Networks guidelines, as it contributes to the EU’s objectives and policies aimed at diversification and security of gas supply.

“We are pleased to join EGL in the effort of offering a new outlet for gas transported from Asia to Europe. We aim to add value to the TAP project by combining our market competence with a strong track-record in developing and building gas pipelines,” said Rune Bjørnson, Executive Vice President for Natural Gas at StatoilHydro.