TAP Expansion Strengthens Azerbaijan-Albania Energy Links

The Trans Adriatic Pipeline (TAP) became capable of transporting an additional 1.2 billion cubic metres of gas per year as of January 1 this year. This has sent an important signal to the market. Azerbaijan will be able to increase its gas exports to Europe, where demand for new sources of gas remains strong. The additional capacity of TAP also opens the door to expanding the geography of supplies. At the beginning of the year, Azerbaijani gas started flowing to Austria and Germany, marking another step in strengthening the country's position on the European market. However, this is not the pipeline's final potential. TAP is designed for a phased increase in capacity to as much as 20 billion cubic metres per year. The current expansion can therefore be seen as another stage in Azerbaijan's broader plans to increase gas supplies to Europe. This is particularly important amid growing interest among European countries in alternative suppliers.

Through this pipeline, natural gas produced at the Shah Deniz field in Azerbaijan's sector of the Caspian Sea is transported to Europe. Connecting with the Trans Anatolian Natural Gas Pipeline (TANAP) at the Turkish-Greek border, TAP runs through Greece, Albania and the Adriatic Sea before reaching the coast of southern Italy.

Against this backdrop, Albania is of particular interest. The country's government, together with US energy company Argent LNG, will assess the possibility of constructing a large-scale LNG storage and regasification terminal on the Albanian coast. The facility is expected to be connected to TAP.

Argent LNG, which is developing an LNG terminal with a capacity of 25 million tonnes per year at Port Fourchon, Louisiana, announced the signing of a memorandum of understanding with the Albanian government to jointly assess the project. According to the company, the plan is to connect the terminal to the Trans Adriatic Pipeline (TAP), the Ionian Adriatic Pipeline (IAP) and the Fier–Vlora gas corridor. This would allow LNG to be received on the Albanian coast, stored and subsequently supplied to several regional markets.

"This infrastructure will create an additional source of natural gas supply that is not linked to Russia and will provide the region with greater flexibility to respond to changing energy needs," the company reported.

The proposed terminal is expected to have regasification capacity of up to around 5 million tonnes of LNG per year, as well as significant storage capacity. The project is being considered as a strategic regional energy hub that would help strengthen security of supply in the Western Balkans and Southeast Europe, particularly during periods of peak demand, supply disruptions or high market volatility.

In March this year, Albania's Deputy Minister of Infrastructure and Energy Erlind Sulo said that the country is well positioned to receive natural gas through TAP.

"This creates an opportunity to meet domestic natural gas needs, reduce dependence on electricity as the sole source of energy, and make energy resources more accessible to households, businesses and industry. We have decided to work on two parallel projects in this direction. The first is the revival of the Vlora thermal power plant project as part of an integrated project connected to the TAP exit point and a floating LNG terminal. The second is the gasification of Korçë, one of Albania's largest cities," he noted.

TAP is the European section of the Southern Gas Corridor and transports natural gas from Azerbaijan's Shah Deniz field to European markets. The pipeline is 878 kilometres long. It runs from the Greek-Turkish border through Greece and Albania, crosses the Adriatic Sea and reaches the southern coast of Italy. TAP's initial capacity is 10 billion cubic metres of gas per year, with the possibility of increasing it to 20 billion cubic metres. Following the TAP market test conducted in 2021, the pipeline made an additional 1.2 billion cubic metres per year of capacity available from January 2026.

It is no coincidence that we mentioned Shah Deniz at the beginning. bp also plays a key role in this chain as the operator of the Shah Deniz development, from which gas is supplied for export through the Southern Gas Corridor. It is the increase in production and export capacity at Shah Deniz that provides the foundation for further growth in supplies through the pipelines.

Unlike oil, which can be stored in tanks, natural gas requires a steady base of buyers. Azerbaijan therefore needs clear commitments on how much gas European customers are prepared to purchase. Based on these commitments, Azerbaijan can increase its export capacity. If Europe decides to raise the volume of gas it imports from Azerbaijan in the future, this could create additional advantages for the country. Such an increase would also require further investment in infrastructure, including compressor stations and pipelines, allowing Azerbaijan to expand its capacity and respond to growing European demand.

It should be noted that TAP right now is effectively the only major non-Russian pipeline route into Southeast Europe. And the fact that it carries an expansion option up to 20 bcm creates a real corridor of opportunity.

Albania isn't the only player at the table. Croatia's FSRU on Krk island has been operational for over three years (2.9 bcm regas capacity) and even though it's running well below nameplate, it's already taken a bite out of the regional niche. Greece is pushing the Alexandroupolis FSRU forward. Slovenia and Albania are effectively fishing in the same demand pool. This is happening because, since 2022, the EU lives by the mantra "any gas but Russian", and Albania, as an EU candidate, reads the room perfectly. Building a gas hub tied to TAP is squarely in line with REPowerEU and Brussels' broader diversification push.

The next step is turning that existing advantage into greater capacity. If Europe is ready to provide the demand, Azerbaijan has both the incentive and the infrastructure base to bring more gas to the market. In that sense, TAP may prove to be not the end of the Southern Gas Corridor, but the point from which its next chapter begins.

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