System operators mull Tap gas pipeline expansion

The operator of the 10bn m³/yr Trans-Adriatic Pipeline (Tap) and connected system will launch a technical study to more than double its capacity after receiving non-binding offers for incremental capacity.

Tap is expected to come on line in the fourth quarter of next year. It will bring gas from the second phase of Azerbaijan's Shakh Deniz field to Italy, running from the Greek-Turkish border, through Greece and Albania.

Firms have submitted non-binding offers for additional capacity as part of an incremental capacity process that was launched in July.

Offers for additional capacity on the Greek–Turkish border at Kipoi — where Tap will connect with the Tanap pipeline — totalled 355 GWh/d for October 2025-September 2029, equivalent to about 12.3bn m³/yr.

And offers for additional capacity at Italy's entry point of Melendugno totalled as much as 249 GWh/d in the 2025-26 and 2028-29 gas years, equivalent to about 8.6bn m³/yr.

And overall demand at Greece's Komotini — the planned Interconnector Greece-Bulgaria (IGB) entry point — reached 17.9 GWh/d for 2023/24-2029/30. Bulgargaz has a 1bn m³/yr supply contract for Tap-delivered gas that will become available once the IGB comes on line. It is expected to be completed in the second half of 2020.

Tap has also received a non-binding connection request in Korca, Albania, for a related request of 16.8 GWh/d. Tap has already entered into discussions with Albanian gas infrastructure operator Albgaz in order to conduct further studies on building a new exit point in the country.

The Tap operator and connected system operators will co-ordinate technical studies, which are expected to be concluded by 13 January, before launching a public consultation on a draft project proposal for the expansion.

The project will then need approval from regulators and authorities before firms will be allowed to submit binding offers for incremental capacity.

Tap will run studies on three possible expansions of the pipeline's capacity — up to 16.8bn m³/yr, up to 20.4bn m³/yr and up to 21.6bn m³/yr.

But Italian system operator Snam also plans to conduct studies to further expand Melendugno entry capacity to 24.5bn m³/yr, as long as market participants commit to cover associated costs of €200,000 ($223,000).

But while Tap expects to double its technical capacity by adding two compressor stations, reaching capacity of 24.5bn m³/yr may require laying a new pipeline parallel to the main line.

The firm does not expect to conclude technical studies for such a project before the 13 January 2020 deadline. And it does not plan to initiate the studies unless at least one market participant agrees to indemnify it for the related costs, esimated at €1.4mn.

Reverse flows

Tap plans to offer reverse-flow capacity at regular auctions once operations start, instead of offering it as part of the incremental capacity process.

Non-binding offers for reverse-flow capacity were insufficient to start investment projects through the incremental process, the operators said.

The capacity requested for reverse flow at the Nea Mesimvria connection point — where gas from Tap reaches Greece's grid — will already be made available by Desfa, at least as an interruptible product without any investment needed in addition to that already planned, the operators said.

Reverse-flow capacity from Italy to Greece could be a further source of Greek import diversification, in addition to Azeri pipeline gas and LNG imports. LNG deliveries have risen sharply this year, as spot LNG import prices fell well below the cost of oil-linked supply under long-term import contracts and gas moved in competition with hard coal and lignite, lifting Greek power-sector gas burn.

Greek LNG deliveries this year have come close to outpacing pipeline imports, mainly from Russia's state-controlled Gazprom.

And Greek LNG sendout could rise in the coming years, competing with pipeline imports.

Commercial operations at the planned 4.3mn t/yr Alexandroupolis LNG terminal could begin in 2022. And Desfa will offer additional regasification capacity at the 3.6mn t/yr Revithoussa LNG terminal from December 2020.