Why TAP? CESD: TAP will contribute to EU Energy Security but Russian monopoly in Central and Eastern Europe will remain BP and the State Oil Company of Azerbaijan signed an agreement to deliver Azerbaijan’s gas to Europe via the Trans-Adriatic Pipeline (TAP) rather than the competing Nabucco West project at the Four Seasons Hotel in Baku on June 28th, 2013 TAP is a consortium established by Norway’s Statoil (42.5%), Swiss’s Axpo (42.5%), and German’s E.ON (15.0%) companies. It is a 800 km long pipeline that will deliver Azerbaijani gas through Georgia, Turkey, Greece, and Albania, under the Adriatic Sea, to Italy. The pipeline will be connected to the internal network via Bulgaria. In addition, Albania, Slovenia, Croatia, Bosnia and Herzegovina, and Montenegro will have an opportunity to benefit from the Shah Deniz gas. The maximum capacity of the pipeline will be 60 billion cubic meters per year in the final stage, meanwhile it will be 10 billion in the first stage and then to a second transport capacity of 21 billion cubic meters annually. Construction of the pipeline is expected to start next year. Of course, all this begs the question: Why was TAP chosen over Nabucco West? According to the experts of Center for Economic and Social Development (CESD), an internationally recognized, leading independent think tank in Azerbaijan, TAP satisfies both Azerbaijan and all stakeholders with interests in the region. Although the pipeline will be constructed bypass Russia , it will not seriously violate the interests of our northern neighbor. Accordingly, Russia opposed Nabucco West because it would seriously weaken Russia’s monopoly position in Central and Eastern Europe. The only country in this region that could benefit from TAP is Bulgaria. Although Nabucco-West would cover larger region in the Central and Eastern Europe. In fact, TAP’s selection will keep Hungary, the Czech Republic, Poland and Romania dependent on Russian gas, but Russia will have to give up hopes of entering the Italian market for the time being. For Russia, TAP can be considered “the best of the worst.” Reasons of satisfaction of European Union are clear . Azerbaijani gas will be directly delivered to the European market for the first time; even though Bulgaria is the only country that will benefit from the ” Russian dangerous monopoloy zone.” A number of EU members, namely Italy, Greece and the Balkan countries, including Albania, will be able to take advantage of this agreement, but the European Union will have to think of another project to eliminate the dependence of Central and Eastern European countries on Russia’s Gazprom. CESD experts states that TAP, which is 450 km shorter than Nabucco, is also more economically profitable for Azerbaijan. Pipeline construction costs will be significantly less than the Nabucco West. Azerbaijan can directly offer its natural gas to the European market at market prices. It means that the country can eliminate its dependence of single-market and can achieve the main goals in gas exports. Furthermore, selecting TAP is a balancing act by Baku to contribute significantly to the energy security of the European Union and, at the same time, not hurt Moscow. In this respect, the TAP agreement has political and diplomatic importance for Azerbaijan. The other winners of the agreement are Turkey and Georgia. By owning TANAP, Turkey will “host” TAP and have the opportunity to benefit from this project for its domestic needs. In general, the amount of gas transported to Turkey annually will increase to 12.6 billion cubic meters. Georgia is still a transit country, and 25 out of 40 billion investment dollars will be spent on the economies of Azerbaijan and Georgia. After signing of TAP project, one more question is open; whether there were needs for TANAP since TAP with its 60 bcm annually capacity will go through Turkey? Economically the respond to this question is obvious; TANAP is only additional cost for Azerbaijan, however, this project is considered mainly as a political project. CESD, 2013
Posted on: Mon, 01 Jul 2013 06:16:42 +0000
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