(MENAFN- AzerNews)
Azerbaijan has proven to be a reliable partner to Europe and
managed to increase gas exports in a short period of time in this
direction. Against the background of the recent global events and
gas crises, Azerbaijan plays an important role in ensuring Europe's
energy diversification. In turn, Europe also has repeatedly voiced
the wish to increase the supplies of Azerbaijani gas via the
Southern Gas Corridor.
With the completion of the Trans-Adriatic Pipeline construction
on December 31, 2020, Azerbaijan began commercial gas supplies to
Europe via the Southern Gas Corridor. Last year TAP transported 8.1
billion cubic meters of gas to Europe, by late 2022, Azerbaijan
plans to increase gas supplies to 9.1 billion cubic meters and to
11 billion cubic meters in 2023.
Ayya Lmahamad of Azernews presents an exclusive interview
with the Trans-Adriatic Pipeline (TAP) Managing Director Luca
Schieppati on Azerbaijan and Southern Gas Corridor's role in
diversifying gas supplies to Europe, Azerbaijani gas export,
potential expansion of SGC and the possibility of supplying
hydrogen.
- As the Russian war in Ukraine has been underway for
over 100 days with no end in sight, pessimist predictions are
abundant that global economies would deteriorate as sanctions start
to bite Russia. Do you think Europe can refuse Russian gas if the
Kremlin continues to go ahead with its war? Given such a negative
scenario, how would you assess Azerbaijan and the Southern Gas
Corridor's role in more or less guaranteeing incessant gas supplies
to Europe?
TAP plays a key role in boosting Europe's energy security,
supply diversification, as well as decarbonisation objectives. In
the future it could play an even greater role in terms of both
providing substantial supplies for this market and contributing to
lower carbon emissions in line with the EU objectives.
As part of the Southern Gas Corridor, TAP is an independent
Transmission System Operator, owned by multiple shareholders. With
regards to relations between sovereign states, TAP is not in a
position to comment.
- What is the volume of Azerbaijani gas transported via
SGC so far and what are the volumes that are expected to be
transported this and next years?
Since we started transporting gas on the last day of 2020, TAP
has delivered more than 13 bcm to Europe.
TAP's initial forward firm long-term capacity, approximately 10
bcm/a, has been allocated to shippers based on long-term gas
transportation contracts signed in 2013 for 25 years, which was
necessary to underpin the investment.
At the same time, capacity corresponding to approximately 5
percent of the initial capacity is available for short-term
bookings through auctions in line with the European regulations via
the PRISMA capacity booking platform. Lately, TAP has been close to
full utilization, with significant short-term bookings to Italy on
top of long-term commitments since mid-February. Our expectation
for 2022/early 2023 is continued high-capacity utilization, both in
the long and the short-terms. In the course of 2021, mainly thanks
to the contribution of TAP, Italy began exporting gas to Northern
Europe.
That said, TAP could double its current capacity in the
future.
- Is the expansion of SGC foreseen in the future? If
yes, what scenarios are on the table? If no, what does it mean, a
refusal to increase gas from the Caspian basin?
About a month ago, the European Commission published the REPower
EU plan to drastically accelerate its clean energy transition and
increase Europe's energy independence. In this plan the European
Commission announced its intention to intensify cooperation with
Azerbaijan in the light of the strategic importance of the Southern
Gas Corridor. According to the European Commission's proposal
'scaling up TAP's capacity would increase the gas supply to the EU
and the Western Balkans'.
TAP could double its current capacity in incremental steps to
further support Europe's security of energy supplies. Doubling the
capacity of TAP is something that has been designed at the project
conception phase. More specifically, TAP's current capacity can
reach slightly over 20 bcm per year.
TAP's expansion capacity is offered to the market through
regular market tests in an open, transparent, and
non-discriminatory way. Thus, TAP offers the opportunity to any
interested party to submit their binding bids for long-term
incremental capacity in the infrastructure.
The 2021 TAP Market test is currently in progress. TAP, together
with SRG and DESFA, held a public consultation on the draft project
proposal for the 2021 market test between January 18 and March 18,
2022. Following feedback received during the public consultation
and the recent gas market developments, TAP, SRG and DESFA recently
announced that they intend to propose a first binding phase in
November 2022 and, eventually, a second binding phase in 2023, to
complete the allocation of all the offer levels.
If market demand is there in the form of firm commitments from
shippers, that are sufficient to make the expansion economically
feasible, TAP can double its capacity by installing additional
compressors to accommodate these volumes.
- How would you assess the possibility of supplying
hydrogen via SGC?
We are fully committed to a sustainable future. Now that the
entire industry is focused on hydrogen as a most likely means to
eventually achieve carbon neutrality by 2050, TAP has been quick to
embrace this notion from the outset. We are currently in the
process of assessing the degree to which TAP can technically
accommodate transporting a blend of natural gas and hydrogen. In
2021, an Initial Hydrogen Readiness study confirmed that TAP has
the potential to transport hydrogen blends in the future.
TAP is continuing with its development and working closely with
its shareholders, key vendors and the industry, as the investment
in the facilities upgrade and percentage to be transported will
likely be developed incrementally over time to match the hydrogen
market demands and in line with the relevant regulations.
TAP is also a participant in the Joint Industry Project H2Pipe
for the development of the world's first guideline for the
transport of hydrogen gas in existing and new offshore pipelines,
which will not only benefit TAP, but other transnational
interconnectors.
In fact, we are now testing our pipe materials in an
internationally recognised laboratory to ensure that the asset is
compliant with the forthcoming hydrogen requirements and
opportunities.
--
Ayya Lmahamad is AzerNews' staff journalist, follow her on
Twitter: @AyyaLmahamad
Follow us on Twitter
@AzerNewsAz
- Tags:
- Azerbaijan
- Southern Gas Corridor
- gas supplies
- Europe
- Trans Atlantic Pipeline (TAP)
- Luca Schieppati
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