12 Dec 2022 18:56

TAP AG ready to complete Stage 1 of pipeline's expansion by 2025 - TAP AG head

BAKU. Dec 12 (Interfax) - Pipeline company Trans Adriatic Pipeline AG is ready to complete the first stage of increasing the throughput capacity of the Trans Adriatic Pipeline (TAP) by 2025, TAP AG Managing Director Luca Schieppati said.

"There are plans to open a market window January 16-22, 2023, during which operators will be able to request long-term transport capacities. We have strived to speed up this process as much as possible, pushing this mandatory stage initially planned for July 2023 forward [to January 2023]," Schieppati said in an interview with Italian newspaper Il Sole 24 Or.

If the additional capacity requested by shippers in January totals up to 2.5 billion cubic meters of gas, then TAP AG can begin investing in overhauling infrastructure following the completion of a check of the project's economic stability, he said.

"With the help of this first step, we will be able to make 50% of these 2.5 bcm available by 2025 and then complete the second stage in 2026. However, full coordination between TAP and all operators is needed to reach that goal, that is, full synchronization between demand for gas, its production, and the construction of transport infrastructure will be required when making a decision on overhauling the pipeline," Schieppati said.

The deadline for doubling TAP's capacity to 20 bcm is 2027, he said.

"Doubling TAP corresponds to the plan of REPowerEU, which has included the Southern Gas Corridor among the solutions to replace Russian gas, and the memorandum of mutual understanding signed by the government of Azerbaijan and the European Commission in mid-July," Schieppati said.

As concerns financing work to double TAP's capacity, the European Bank for Reconstruction (EBRD) and Development could finance 75% of overall investments, 1.2-1.3 billion euros, which, "according to our plans, should come from financial institutions," he said.

"The EBRD is prepared to support us if the expansion project meets the requirements of energy security and the transition to green energy," Schieppati said.

TAP AG has set its sights on becoming an operator that views TAP's expansion as the only possible way to "decarbonize infrastructure" and transport gas with low levels of carbon, from biomethane to hydrogen, he said.

"For this reason, we have begun preliminary studies that confirm the ability to transport up to 10% hydrogen [mixture] through TAP with minor modifications, and we're testing, among other things, the compatibility of our steel and TAP's seal welds with 100% hydrogen transport in a laboratory in Holland," Schieppati said.

A special plan to reduce greenhouse gas emissions 6% over three years has been prepared by the company, Schieppati said. "We're cutting fugitive emissions, as well as studying the possibility of connecting compressor stations to very high voltage networks and installing electric motors running on green energy instead of gas turbines," he said.

Schieppati said earlier that TAP's capacity would be expanded to 20 bcm by the end of 2027 without laying new pipes and without the need to carry out new works in Italy, only by installing new compressors in Greece and Albania.

Supplies of Azerbaijani gas began running through TAP, part of the Southern Gas Corridor, to consumers in Italy, Greece, and Bulgaria on December 31, 2020. TAP was built to deliver 10 bcm of natural gas per year to Europe from the Shah Deniz field as part of Stage 2 of its development. Its throughput capacity can be doubled to 20 bcm per year.

According to TAP AG, 18.5 bcm of Azerbaijani gas has been exported to Europe through TAP since it began operating, almost 16 bcm of which has gone to Italy.

Exports are projected at 22-23 bcm in 2022, including 11.5 bcm to Europe.