The Paris Climate Agreement of 2016 represented a commitment by nearly 200 countries across the world to lower their carbon emissions starting in 2020. Achieving the carbon reductions these countries committed to will be a significant challenge - either they will have to reduce their overall energy requirements or deliver the same overall levels of energy using cleaner methods.
This is an unprecedented operational challenge; the world effectively needs to be weaned off sources of energy on which it has become dependent over the past 150 years, over the space of a few years. The potential rewards of doing so are enormous, not only in terms of cost and environmental sustainability, but also energy security - the ‘uninterrupted availability of energy sources at an affordable price.’
Several initiatives have already been undertaken to achieve these goals with one of the highest profile examples being the Trans Adriatic Pipeline (“TAP”), the European leg of the Southern Gas Corridor. TAP has been designed to transport natural gas from the Shah Deniz II field in Azerbaijan to Europe. TAP will contribute to the diversification, decarbonisation and security of Europe’s energy supply.
Luca Schieppati, Managing Director of TAP AG, and Walter Peeraer, TAP President, were kind enough to take some time out to discuss the significance of TAP on the future of energy in Europe. With more than 25 years in the European gas sector and possessing extensive knowledge of European gas markets, Mr. Peeraer and Mr. Schieppati are the ideal candidates to navigate the operational and political challenges that TAP will encounter before becoming a reality.
Mr. Peeraer began by discussing the purpose of the 878 km-long TAP: “TAP will connect with the Trans Anatolian Pipeline (TANAP) at the Turkish-Greek border at Kipoi, cross Greece and Albania and the Adriatic Sea, before coming ashore in Southern Italy, where it will connect with the Italian gas transmission network (Snam Rete Gas).”
Mr. Schieppati adds: “In a nutshell, we are not only focusing on realizing a strategic piece of natural gas infrastructure, but a pipeline that: safely delivers Caspian gas to Europe, has minimal environmental, cultural and socio-economic impacts during its construction and operations and respects and cares for the communities along the route.”
The long-term importance of TAP to Europe’s energy security cannot be overstated. The European Commission’s Energy Security Strategy, drafted in 2014, proposes that each member state of the EU should have access to at least three different sources of supply. Some of the more striking statistics serve to underline the importance of TAP to achieving the goals of this strategy:
● Presently, much of Europe is dependent on coal - a source of power which emits twice as much CO2 as natural gas. The closure of coal-fueled power plants over the next 5 years creates a natural opening for natural gas usage.
● As renewable energy’s share of total energy out in Europe doubled from around 8.5% in 2004 to 16% in 2016, renewable energy output is notoriously intermittent volatile and natural gas can provide a cleaner hedge than fossil fuels for the sake of energy security.
● According to one study[1], energy consumption in South East Europe in particular depends on oil and coal - with these constituting over 60% of these countries’ energy mix.
Quite clearly, the introduction of TAP is an imperative for Europe. Of this, Mr. Peeraer says: “Europe has declining production and needs new sources of natural gas to meet its long-term demand, fuel economic recovery and diversify energy supply. Gas – as the cleanest fossil fuels – will continue to play a key, strategic role in the energy mix for decades to come, contributing to decarbonisation across the continent.”
Several countries stand to benefit as TAP lays a base for future infrastructure such as the Ionian Adriatic Pipeline (IAP) and the Interconnector Greece Bulgaria (IGB). As Mr. Schieppati points out, many of the countries along these routes currently depend on a single energy source or have no access to natural gas at all - hindering development and creating huge price volatility for the end consumer.
It will come as some relief then that real progress is being made on TAP since construction began in 2016. Mr. Schieppati says: “TAP is on schedule. In terms of overall project progress, we are more than 70% complete – including all engineering, procurement and construction scope.” Huge progress in particular has been made across Greece, Albania and Italy.
Mr. Peeraer adds: “In Greece, as of mid-April 2018, 535 km of our right of way have been cleared, approximately 521 km line pipes strung, over 500 km welded, 419 km back-filled and approximately 306 km are being reinstated.
In Albania, approximately 184 km have been cleared and graded along our route, 178 km line pipes strung, 174 km welded and approximately 155 km back-filled. Circa 117 km are being reinstated.”
Mr. Schieppati says: “This means that between Greece and Albania, TAP has now cleared and graded 94% of its corridor. Additionally, we have welded 88% of steel line pipes and around 75% pipes are already in the ground (back-filled). In Italy, in line with the Single Authorisation permit granted by the Ministry of Economy on 20 May 2015, TAP continues to progress its secondary permitting activities. We are also digging the pit so as to enable the building of the micro-tunnel, which will connect the offshore section of the pipeline with the 8km onshore part in Southern Italy. This state-of-the-art technical solution enables the pipeline to bypass the beach completely and has the least environmental impact.”
When asked about the difference between TAP and others in the industry, Mr. Peeraer says: “Compared to the major international companies, TAP is a relatively small company. But whatever we lack in size, we make up for it in dedication, hard work and excellence.” Despite its size, it’s able to compete with the biggest and best by carefully selecting partners and suppliers to deliver its project on time.
These companies come from across Europe, representing the fact that above all, TAP is a Europe-wide effort. They include Volvo (Sweden), Spiecapag (France), Delta Maritime (Greece), Corinth Pipeworks S.A. (Greece), Bonatti S.p.A (Italy), ABKons (Albania), PSI Software AG (Germany) and Aktor (Greece), who all contribute, in addition to smaller suppliers called in along the phases of the pipeline construction.
Conclusion: A lasting impact on Europe’s Energy Infrastructure
In addition to promising a bright future for European energy security, TAP has already made an impact on the local infrastructure in areas where it passes. By way of example, it has improved local infrastructure via the rehabilitation of access roads and bridges in Albania with the first phase alone benefitting over 200,000 people - nearly 10% of the country’s population. Additionally, TAP is investing over 55 million Euro in other projects along the pipeline route, including the renovation of several schools in Albania, cleaning marine litter in Italy, donating equipment to emergency services in Greece, to name just a few.
As Mr. Peeraer says, it’s just the beginning. “TAP will contribute to the development and expansion of the gas infrastructure in South East Europe, ultimately boosting the countries’ roles as energy hubs. TAP remains committed to contributing to the Albanian Gas Master Plan through technical expertise as well as by enabling two gas exit points.”
Ultimately, its impact will be felt way beyond energy security - something which can appear intangible to many. Mr. Schieppati adds: “Our example can also encourage other international investors to invest in these countries.” The arrival of TAP, then, is set to bring a long-lasting positive impact to this corner of Europe both above and below ground.
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