UK energy expert: Albania will benefit from the construction of the Trans Adriatic Pipeline (TAP)

Dr. WinrowGeneva, September 10, 2014 – The Trans Adriatic Pipeline (TAP), which will transport gas from the Caspian Basin through Turkey, Greece and Albania before reaching the coast of Southern Italy, will be a good investment for Albania and its economy, says the UK energy expert and tutor at the prestigious Oxford University, Dr. Gareth Winrow, in an interview with the Albanian news agency Presheva Jone.

“Albania will certainly benefit from the construction of TAP. For the first time, Albania will be connected to a gas grid. As well as being able to exploit a new form of energy, the realisation of TAP will provide a number of other economic, political and strategic advantages for Albania.

“The economy will benefit from major infrastructural development, the provision of jobs, and the expansion of foreign direct investment. The building of gas storage facilities will boost Albania’s strategic importance. Albania is also destined to become a regional energy hub with TAP being connected to the planned Ionian-Adriatic Pipeline (IAP),” says the Dr. Winrow to the Albanian news agency Presheva Jone.

The pipeline is currently in its planning stage, but the construction is expected to start in 2016.

Natural gas from the rich gas fields in Azerbaijan is destined to reach the European market and provide safer and more reliable energy access.

The European Union (EU) is currently reliant on Russia, Norway, Algeria and other countries for most of its energy imports. The turbulent relationship between Moscow and Ukraine has on several occasions reduced energy imports to the EU due to disagreements concerning payments and debts for past gas deliveries.

The realization of TAP will not challenge Russia’s energy dominance

The construction of TAP is not expected to significantly reduce EU’s energy reliance on gas from Russia; however, Dr. Winrow believes the pipeline will bring benefits to the economies of states in southeastern Europe:

“The EU imports over 60% of its gas, with one-third of imports coming from Russia. Gazprom currently accounts for 27% of EU’s gas consumption. According to the International Energy Agency (IEA), the EU’s gas needs are projected to rise from around 520 bcm per annum at present to over 620 bcm by 2030.

“Clearly, TAP will make little impact on the EU’s overall growing energy demand. However, the TAP project will have an important bearing on the economies of states in southeastern Europe including EU member Greece. There are also plans to hook up TAP with the future Ionian-Adriatic Pipeline (IAP) to connect with other markets in the Balkans. The EU member state Bulgaria could also be linked to TAP via the Interconnector Greece-Bulgaria,” underlines Dr. Winrow to the Albanian news agency Presheva Jone.

As the EU seeks to diversify its energy reliance on Russian gas, the completion of TAP is not expected to reduce Russia’s energy dominance in in Europe.

However, if the TAP can be linked to other pipelines in the region, EU’s dependence on Russian gas may be cut and could allow the EU to receive stable energy access:

“It would appear at first sight that the realisation of the TAP project would not pose an immediate challenge to Russia’s dominance over gas markets in Europe. In 2013 Gazprom delivered over 130 billion cubic meters (bcm) of gas to EU member states. The initial annual capacity of TAP will be 10 bcm, although the intention is to expand annual capacity eventually to 20 bcm.

“However, the significance of the TAP project is that its completion, together with the construction of the Trans-Anatolian Gas pipeline (TANAP) across Turkey and the expansion of the South Caucasus Pipeline by 2019, would mark the first stage of the development of the much-hyped Southern Gas Corridor (SGC).

“EU officials are hoping that the SGC will reduce Europe’s dependence on Russia’s gas imports. The SGC could be further expanded to include more gas imports from Azerbaijan as well as possibly from Iraqi Kurdistan and Turkmenistan and even from Israel and Iran. This would necessitate the construction of other pipeline connections from Turkey’s western border to Europe in addition to TAP,” states Dr. Winrow to the Albanian news agency Presheva Jone.

The prospects for the South Stream gas pipeline must be seriously questioned

Another pipeline project that is expected to pass through the Balkans is the much-contested South Stream pipeline initiated by Moscow.

The pipeline is expected to transport gas from Russia through Bulgaria, Serbia, Hungary and Slovenia before ending in Austria.

As the Bulgarian government recently decided to halt the negotiations to construct the pipeline on its territory, Dr. Winrow believes the construction of the pipeline is unlikely to happen and can give Ukraine continuing leverage over Russia in the future:

“In contrast to TAP, the prospects for the South Stream gas pipeline must be seriously questioned. This is in spite of the continued backing for South Stream from major energy companies such as ENI, Wintershall and EDF who are working together with Gazprom on the major gas pipeline project to carry up to 63 bcm/y of Russian gas to central Europe along a new route, which would bypass Ukraine.

“The project also has the support of the Austrian company OMV. In 2010 Moscow and Vienna signed an intergovernmental agreement to connect South Stream with the energy hub at Baumgarten in Austria. Even prior to the current crisis in Ukraine, South Stream had been opposed by the European Commission in Brussels because the pipeline project was against the provisions of the EU’s so-called Third Energy Package – concerning the need to “unbundle” the ownership of natural gas production and transmission lines and grant third party access,” says Dr. Winrow.

The energy expert also adds that the worsening situation in Eastern Ukraine will further complicate the finalization of the South Stream pipeline. The EU has decided to impose sanctions on Russia due to Moscow’s involvement in this year’s unrest in Crimea and Eastern Ukraine. Relations between EU and Moscow have reached an unprecedented level of mistrust:

“The serious deterioration in relations between EU member states and Russia over Ukraine will make it much more difficult to realise South Stream in the foreseeable future. Given Bulgaria’s recent decision to freeze negotiations on the construction of South Stream across its territory in the face of opposition from Brussels, there is increasing speculation that South Stream may be re-routed to bypass Bulgaria and instead cross Turkey.

“But, to reach markets in central Europe, South Stream would still have to cross the territory of EU member state Greece, and the Austrians would also somehow need to convince the European Commission that their bilateral agreement with Moscow did not violate the provisions of the Third Energy Package.

“Given the current circumstances, South Stream may be placed on an indefinite hold. This would then give Ukraine continuing leverage over Russia bearing in mind that currently Gazprom delivers approximately 80 bcm/y to markets in Europe via the pipeline network extending across Ukrainian territory,” ends Dr. Winrow in his interview to the Albanian news agency Presheva Jone./ Blerim Mustafa

Photo credit: Gareth Winrow (Twitter), Voice of America Editorials

* This article was written by the author in his personal capacity. The opinions expressed in this article are the author’s own and do not represent the view of Leidar

Link to original article (Presheva Jone, also available below): http://www.preshevajone.com/uk-energy-expert-albania-will-benefit-from-the-construction-of-the-trans-adriatic-pipeline-tap/

Gareth Winrow

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