Azerbaijan Today’s interview with Kjetil Tungland, Managing Director of the Trans Adriatic Pipeline

AT: The background to the TAP (Trans Adriatic Pipeline): why the need and what are the benefits?

Europe has in the last couple of years repeatedly expressed its desire to diversify its gas supply. Currently there are a wealth of gas reserves that could be available, if a new transport system – one such as the Trans Adriatic Pipeline – were built to bring Caspian gas to European markets. Europe currently relies mostly on Russian gas supplies through several existing pipelines, and it has not yet linked its pipeline systems to the Caspian and Middle East gas reserves. However, Europe realizes the strategic need to diversify its gas supply.

Tapping into new proven gas reserves requires the construction of alternative infrastructure projects that will eventually make new gas supplies available to Europe. The 520km long pipeline will transport gas via Greece and Albania and across the Adriatic Sea to Italy’s southern Puglia region and further to Western Europe. The project is aimed at enhancing security of supply as well as diversification of gas supplies for the European markets.

TAP will open a new so-called Southern Gas Corridor to Europe and market outlet for natural gas from the Caspian region. The project is designed to expand transportation capacity from 10 to 20 bcm per year depending on available supplies.

The TAP project also envisages the development of natural gas storage facilities in Albania to further ensure security of supply during operational interruptions of gas deliveries.

AT: Who is behind the company?

EGL, a European energy trading company with its own assets, started the Trans Adriatic Pipeline (TAP) project in 2003. In 2008, Statoil joined the project as a 50% shareholder bringing with them a wealth of knowledge and expertise in offshore gas pipeline construction. In May 2010 E.ON Ruhrgas joined the TAP project as an additional shareholder. The project now consists of three shareholders. EGL and Statoil both now have a shareholding of 42.5% each and E.ON Ruhrgas holds a 15% share in TAP.

AT: What is the company’s approach to corporate social responsibility?

TAP has a rigorous business CSR policy already in place. It recognises the effect that such projects can have on the wider community. As a benchmark, TAP has chosen to adhere to the European Bank for Reconstruction & Development (EBRD) Performance Requirements, as they combine best practice (e.g. International Finance Corporation (IFC) and Equator Principles) with European standards such as the Aarhus Convention.

AT: When will the pipeline be complete?

TAP is fully aligned with upstream developments of the Shah Deniz II field. This means that TAP will be ready in line with the upstream production schedule. Currently, BP the technical operator of Shah Deniz II, has communicated that first gas will flow from Shah Deniz II at the end of 2016/beginning of 2017)

AT: When complete, what are the prospects for future development?

 Initially TAP will transport 10bcm of gas per annum.

TAP has been designed to expand to be able to transport up to 20bcm of gas. So, as more gas comes on stream then TAP is in a unique position to accommodate additional volumes.