Trans Adriatic Pipeline: the first steps to gas security in the EU?

Construction Intelligence Center 12 Jan 2017 EUROPE ENERGY & UTILITIES

The Trans Adriatic Pipeline (TAP), part of the TEN-E Southern Gas Corridor (SGC), will supply natural gas to Europe from Azerbaijan — but will this give gas security to the EU?

TAP — born from the Trans Anatolian Pipeline (TANAP) project — will connect Azerbaijan, through Greece, Albania and the Adriatic Sea to Italy. Construction work on the project started in 2015. TAP is expected to be operational in 2020 and have a capacity of 10bcm (billion cubic meters) of gas per year, with the possibility of expanding to 20bcm per year.

The European continent is currently experiencing high gas prices, volatile price fluctuations, and high unemployment. According to Eurostat, in the second quarter of 2015 Italy had the third most expensive gas per household.

The EU has an energy consumption spending of €1bn every day. It imports 53% of its energy consumption, 66% of which is natural gas.

With the completion of TAP, gas prices are expected to drop. Cheaper gas from Azerbaijan will mean reduced living costs in Europe, where 48% of the imported energy is for heating and water heating.

The TAP investment in Greece constitutes more than €1.5bn — the country will receive 1bcm of cheap gas with the project.

Even though the EU will have an extra source of natural gas, the TAP gas supply will not be enough for the EU to satisfy the increasing need for energy and move into least toxic sources of fossil fuel.

The diversification of supply is a common answer to increase gas security, but this is not supported by the energy objectives of the EU. The EU commitment to reduce “greenhouse gases”, the dependence on coal, and other non-environmentally friendly sources of energy will increase the demand for gas.

In the next four years gas imports will increase, as the EU gas consumption will rise from the current 45% to 65% by 2020. Furthermore, the renewable energy produced is not enough to meet the energy demand, and the only viable option continues to be natural gas.
 
Russia currently dominates the gas supply in the EU. A stress test to analyse the impact of stopping the supply of the Russian gas via the Ukrainian route showed that in 6 months the EU could be missing 5-9bcm of gas. It supplies 39% of the total gas that comes into Europe.

This dominance of the Russian gas has impeded regular and steady supply. The Shah Deniz II gas field in Azerbaijan will compete with the existing Russian supply, creating a competitive environment, and reducing high price fluctuations — but will not supply enough gas to give security to the European market.

To conclude, a long-term gas security will not be provided by the TAP supply — the Trans European Energy Networks (TEN-E) will have to complete additional gas projects before we can see gas security in the EU.

* Visit the Construction Intelligence Center for more information on the construction industry.

 

With 11 websites and newsletters covering all the key areas within the construction industry, World Construction Industry Network is the leading global construction information resource. READ ABOUT US
PRIVACY POLICY

STAY IN TOUCH!

LATEST TWEETS

World Construction Network | www.worldconstructionnetwork.com is a product of GlobalData. Copyright © 2019 GlobalData. All rights reserved.