The first gas from Azerbaijan has reached Greece and Bulgaria, via the Nea Mesimvria interconnection point with DESFA, the Trans Adriatic Pipeline (TAP) operator announced on the last day of 2020.
The Azeri gas also flows to Italy, via the Melendugno interconnection point with SNAM Rete Gas (SRG).
TAP (part of the Southern Gas Corridor) transports natural gas from the giant Shah Deniz field in the Azerbaijan sector of the Caspian Sea to Europe. The 878 km long pipeline crosses Greece and Albania and the Adriatic Sea, before coming ashore in Southern Italy.
According to current supply contracts, TAP will deliver 1bcm/year to Greece, a similar volume to Bulgaria and 8bcm/year to Italy.
Greece: Important transit hub
TAP gas is expected to cover 20-30% of Greece’s yearly demand.
Plans on doubling the TAP capacity are already drafted. The managing director of TAP pipeline, Luca Schieppati, announced that in 2021 “a market test will be carried out to double the transport capacity of the TAP pipeline to 20 billion cubic meters per year”.
“With this pipeline, in combination with other projects such as the Greek-Bulgarian natural gas pipeline IGB and the Liquefied Natural Gas terminal of Alexandroupolis, Greece becomes the most important transit hub for the transportation of alternative natural gas sources in Southeastern Europe” the Greek Minister of Energy, Kostis Hatzidakis, has said when TAP became operational, in December 2020.
The Greek government has repeatedly emphasized that the TAP pipeline will play a key role in EU’s decarbonisation efforts, the European market integration and to strengthen Europe’s energy security.
“The start of gas deliveries is a significant milestone for Europe’s gas market” Marija Savova, TAP’s head of Commercial, said. “TAP is an essential part of the continent’s gas network, contributing to the energy transition roadmap. We offer a reliable, direct and cost-effective transportation route to South East European countries and beyond.”
Bringing down prices and dependence on Russia
TAP’s prices are not directly linked to oil prices, offering more flexibility and room to negotiation to its clients.
As the Independent Commodity Intelligence Services, ICIS, notes, the planned diversification of gas supplies has already born fruit for Bulgaria. The state-owned supplier Bulgargaz was able to negotiate a 40% price reduction with Gazprom under a new hub price-based formula.
According to TAP operator, Bulgaria will be able “to cover up to 33% of its total gas demand through TAP after the completion of the Bulgaria-Greece Interconnector (IGB)”.
Italy also expects price cuts from its other gas suppliers. Natural gas volumes heading to Italy will represent around 12% of the national demand for gas.