Insight
Turning on TAP: Trans Adriatic Pipeline completes Europe’s Southern Gas Corridor
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*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
On 15 November 2020, the Trans Adriatic Pipeline (TAP) began commercial operations. TAP – the final section of Europe's US$40 billion Southern Gas Corridor from Azerbaijan – will ultimately deliver 10 bcm per year from BP’s Shah Deniz Phase Two megaproject in the Caspian Sea. Commissioning of TAP’s initial capacity follows four and a half years of construction, EUR 4.5 billion of capex and a variety of obstacles – especially in Italy, where the pipeline ends. This is a long-awaited milestone for all stakeholders – investors, upstream source of supply, host governments and offtakers alike. TAP has launched in a turbulent European market environment. But it is a long-term project with expansion plans and wide-ranging significance. We address what its commissioning means from all the key angles.
Table of contents
- Executive summary
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TAP has been years in the making
- Ownership structure is well-aligned for reliable operations
- A successful construction phase, but it wasn’t all plain sailing
- A commercially attractive infrastructure investment
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TAP is the final outlet for Shah Deniz gas
- TAP extends Azerbaijan’s gas export reach beyond Turkey
- But upstream value, at least initially, is driven by condensate sales
- Re-escalation of Azerbaijan-Armenia conflict is a background risk
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TAP will reshape gas markets in southern Europe
- Piped gas is essential to meet Italian demand
- TAP carves out a distinctive path, with a diverse group of offtakers
- For Italy, a milestone for the PSV hub and south-to-north flows
- For Bulgaria and Greece, a major shift for concentrated gas markets
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What next? TAP expansion plans are at top of future agenda
- TAP expansion outlook will be confirmed in 2021
- Russian gas may supply expansion, with no option a perfect strategic and economic fit
- TAP expansion should be attractive, including for its initial shipper
Tables and charts
This report includes the following images and tables:
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TAP overviewTAP: key figuresNetbacks on Shah Deniz gas sales to Italy
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Italy gas supply-demand balanceGSAs for TAP gasACQ of key gas importers into ItalySouthern Gas Corridor capacity expansion plans
What's included
This report contains:
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