Balkans could support Tap expansion

The Balkans could underpin the future expansion of Azeri gas delivery capacity to Europe on the Trans-Adriatic pipeline (Tap).

The western Balkans in particular are interested in joining the southern gas corridor linking Azerbaijan to southern Europe, Tap's commercial team said. But the region's future interest in Tap — partly based on the need for gas to replace coal and lignite for power generation — is "not easy to predict as it depends on many variables", Tap said.

Tap has an existing nameplate capacity of 10bn m³/yr, but this could be doubled if there are sufficient binding capacity commitments at a market test in July.

Any expansion will require a further development of upstream production, particularly as Azeri domestic consumption has increased in recent years. The Azeri government earlier this month reconfirmed its plans to develop upstream production, Tap said.

The South Caucasus — which links Azerbaijan with Turkey through Georgia — and the Trans-Anatolian pipelines would also need to be expanded. The pipelines are "quite aligned and based on the pre-investment, they can easily be expanded if there is demand and supply", Tap said.

New European infrastructure would be required. Additional interconnectors between Bulgaria and Serbia and from Serbia to Hungary and Romania will allow gas to reach these markets, Tap said. Hungary has already expressed interest in importing some Azeri gas in the future.

Albania has "clear interest" but a lack of downstream infrastructure means it is unable to receive Tap supply even as the gas already transits the country, Tap said. As soon as there is infrastructure, the country can receive gas through the line as there is available capacity on the secondary market and commercial reverse flows, Tap said.

Albania has approved its gas market development plan, which includes a number of infrastructure projects. "We are collaborating with them for an exit point to be built, and we will develop a pressure reduction and metering station", Tap said.

Tap's initial capacity of 10bn m³/yr has already been fully booked for the first 25 years, with about 8bn m³/yr for delivery to Italy and 1bn m³/yr each for Bulgaria and Greece. Some capacity is available for short-term bookings through auctions.

Tap expansion may be in phases

The pipeline's expansion could take place in phases, depending on available supply and binding requests for additional capacity.

"A limited and partial expansion is possible depending on the demand and the offer, we do not need to install a new pipeline but more power," Tap said. The operator could install new power in the existing two compressor stations at Kipoi in Greece and Fier in Albania, and to expand further, install one or two new compressor stations, Tap said.

The binding round of an incremental capacity project was postponed from the fourth quarter of 2020 because of disruptions to the energy markets caused by the Covid-19 pandemic.

By Eleni Charisi