• TAP pipeline opens for business with commercial gas operations

    The Trans Adriatic Pipeline (TAP), which will bring Azeri gas into Italy, has kicked off commercial operations, more than four years after construction work first began, TAP said. The pipeline, whose shareholders include Snam and BP, said it had begun to offer capacity along the 878 km line which will be able to carry 10 billion cubic metres of gas per year.

    TAP is the final leg of a $40 billion project named the Southern Gas Corridor, which is a cornerstone of the European Union’s energy security policy to wean the bloc off Russian gas.
    Opposition from local and environmental groups had caused delays to the 4.5 billion euro ($5 billion) pipeline but first gas is now expected to start flowing by the end of this year.

    “It is the first delivery of contracted Azerbaijani gas beyond Turkey, it provides a fourth gas import pipeline corridor for the EU, it boosts diversification and energy security,” said Wood Mackenzie Research Director Murray Douglas.

    TAP, work on which started in 2016, was built to be able to transport double its initial capacity. But the transition towards cleaner renewable fuels to de-carbonise economies has raised questions about demand and costs.

    “More Azerbaijani gas had been the initial hope to fill TAP expansion, but this is looking increasingly unlikely because of challenging project economics and better-positioned supply alternatives, including Russian gas,” Douglas said.

    Besides Snam and BP, TAP AG shareholders include Azerbaijan’s SOCAR, Fluxys, Enagas and Axpo. There is no agreement on when oil demand could peak, but expectations weigh on oil companies’ plans to explore for and develop new resources

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