Tap details gas capacity expansion plan

Italian energy regulator Arera has approved the final version of a proposal for an expansion of capacity along the 10bn m³/yr Trans-Adriatic Pipeline (Tap).

The extent of the expansion will depend on long-term capacity bookings for up to a maximum of 20 years during the binding market test, scheduled to begin on 17 July (see timetable). System operators will prioritise bids for the longest duration and connected to the most points.

The expansion plans were informed by indications during the non-binding market test carried out in July 2019. Firms had submitted offers for additional capacity along the whole route from Tap's entry point at Kipoi in Greece to Melendugno in Italy.

The plan envisages either a limited, partial or full expansion, which could at most double Tap capacity (see expansion table). The initial draft published during the consultation phase early last year had omitted the limited category.

Under all three scenarios, new compressor stations would be needed. The Italian grid would be able to accommodate a limited and partial expansion without extra works but more investment — an estimated €1.6bn ($1.9bn) — would be needed to enable a full expansion.

Additional investments by Greek system operator Desfa would be needed to accommodate interruptible Tap flows. Capacity at Nea Mesimvria is offered at competing auctions until the end of 2023, when the completion of new compressor stations will lift overall entry capacity into the Greek grid.

And a new interconnection point may be introduced in the area of Korca, Albania, following a non-binding connection request for 16.8 GWh/d received during the first phase.

The additional capacity could come on line in 2026-2027, depending on the outcome of the market test.

Italian entry tariffs at Melendugno will vary depending on the extent of the expansion, ranging from €2.15/yr/m³/d in a limited expansion scenario to €2.12/yr/m³/d plus a mandatory premium of €3.80/yr/m³/d if there is a full expansion, to account for the required network upgrade.

Tap has an existing nameplate capacity of 10bn m³/yr which has already been fully booked for the first 20 years, with 8bn m³/yr for delivery towards Italy and 1bn m³/yr each for Bulgaria and Greece. Any additional capacity could be used to deliver more Azeri supply to other European countries, while there may also be scope for deliveries from other sources. The Azeri government reconfirmed its plans to develop upstream production in February, Tap said.

The western Balkans in particular are interested in joining the southern gas corridor linking Azerbaijan to southern Europe, Tap's commercial team told Argus in February.

Tap deliveries to Italy have held just above booked capacity on most days since first gas flowed at the end of last year. Long-term bookings step up gradually and reach 22.9mn-23.9mn m³/d by February 2022, according to Italian system operator Snam (see graph).

By Samar Ahmed and Jacopo Casadei

Imports at Melendugno above capacity mn m³/d