Azernews.Az

By Gulgiz Dadashova

The selection of Trans-Adriatic Pipeline (TAP) project by the consortium developing Azerbaijan's giant Shah Deniz gas field in the Caspian Sea to build the European section of the Southern Gas Corridor was in international limelight last week.

The TAP project, which is designed to transport gas from the Caspian region via Greece and Albania and across the Adriatic Sea to the south of Italy and further to Western Europe, was competing with Nabucco West for Azerbaijani gas export to energy-thirsty European markets.

Shah Deniz is expected to make its final investment decision by December 2013 and TAP is expected to make its final investment decision until then.

Now one of the main issues on the agenda is financing of the pipeline construction, which can be much easier with the emergence of a new shareholder.

TAP's shareholders are Axpo of Switzerland (42.5 percent), Norway's Statoil (42.5 percent) and E.ON Ruhrgas of Germany (15 percent). Shah Deniz Consortium members BP, SOCAR and Total each have options to purchase shares in TAP which if exercised in full would give them a total stake of 50 percent in the project.

Currently, BP, SOCAR and Total are involved in the funding of the development of the TAP project.

Axpo Chief Executive Heinz Karrer said on June 30 that the company could reduce its stake in the project.

"We could lower our stake from the current 42.5 percent to a single-digit participation," Karrer told Swiss Sunday newspaper SonntagsZeitung.

He said that it could be done in order to limit the company's exposure to risks in the gas market.

Karrer said that if Axpo and its partners do not find investors to finance construction of the pipeline and have to pay for it themselves, Axpo will have to inject "a low three-digit million amount".

Earlier it was reported that Turkey, whose partnership with the rival Nabucco West project is underway, has received a proposal to become a partner of TAP.

Turkish Energy Minister Taner Yildiz said the country will consider the proposal.

Azerbaijan's energy company SOCAR also plans to become a TAP shareholder. A SOCAR executive earlier said that it is important for Azerbaijan to be involved in TAP to control a part of the process, to receive dividends from its own gas transportation and to ensure reliability of the project.

The opening of the Southern Gas Corridor will allow Caspian gas to eventually reach several countries in Europe, in particular in Southeast Europe.

The International Energy Agency predicts that the EU gas demand will increase from the current 526 billion cubic meters to 622 billion cubic meters by 2030. Also, the EU's Energy Roadmap 2050 forecasts that gas imports will rise, notably due to a decline of domestic production. This additional demand should be covered by new, additional gas suppliers.