Tap could deliver Iranian gas to Europe

OREANDA-NEWS. July 16, 2015. Iranian gas could be shipped to Europe through the Trans Adriatic Pipeline (Tap) if a supply deal signed in 2008 between Iran and EGL — which was integrated into Axpo in 2008 — is finalised.

EGL signed a 25-year 5.5bn m?/yr gas supply agreement with Iran to ship through the Tap pipeline which will link Turkey with Italy through Greece and Albania. But the agreement was never finalised because of energy sanctions against Iran.

But the deal concluded on Tuesday between Iran and P5+1 — China, Russia, the US, the UK, France plus Germany —will see US and EU sanctions rolled back on 15 December, which could allow Iran to increase investment in upstream gas development.

The planned 10bn-20bn m?/yr Tap pipeline must be commissioned by 1 January 2020, but the initial 10bn m?/yr capacity is expected to be used to ship gas from the second-phase development of Azerbaijan's Shakh Deniz field. Capacity may later be expanded up to 20bn m?/yr and the Tap consortium would welcome Iranian gas once the pipeline has increased its capacity, it said on Wednesday.

Iran had already expressed an interest in joining Tap and also the Trans Anatolian Pipeline (Tanap) which is to go from the Georgia-Turkey border to the Turkey-Greece border where it would join the Tap pipeline. Azerbaijan has said Iran is welcome to join the Tanap project.

Italy's network operator Snam has also expressed an interest in joining the Tap project, which will connect to the Italian network. Snam is also considering expanding Italy's network to increase capacity from southern Italy, where Tap would connect to the system, to the north, where Italian gas demand is highest.

Snam could take up to a 20pc stake in the project, it said in June, depending on the willingness of existing shareholders to sell.

Tap expects to finalise its shareholder structure by 2016, when it plans to begin pipeline construction. Tap unites BP (20pc), Socar (20pc), Statoil (20pc), Fluxys (19pc), Enagas (16pc) and Axpo (5pc).