15/12/2011
In a recent Op-Ed you wrote for the Greening Europe Forum, TAP stated that the EU’s Caspian strategy should be based on realistic assumptions regarding gas volumes available in the Caspian. Do you feel this is not the case now? Is the Nabucco project, supported by the Commission, unrealistic in its ambitions?
If you look at the facts, what we know today is that the only gas available in the Caspian for export to Europe is the 10 billion cubic meters from the Shah Deniz II field in Azerbaijan. Not more, not less. Any pipeline that aims to open the Southern Gas Corridor in a cost-effective manner needs to be aligned with these volumes of gas.
However, we also know that it is likely that more gas will be available in the region post-2017. This is why scalability is such an important criterion for the Shah Deniz consortium. TAP is the only pipeline which will be able to double its capacity from 10bcm to 20bcm as more gas volumes become available.
I remain convinced that of all the competing pipelines in the Southern Gas Corridor, the Trans Adriatic Pipeline is the only one that ticks all the boxes.
Nabucco is a 30 bcm pipeline project. If there’s only 10 bcm of gas available from Caspian in 2017, it means two thirds of Nabucco will be empty. This is simply not economical.
With Caspian gas, Europe will still be dependent on very volatile political partners and risks to upset Russia? Is it worth the big investment? Should EU not invest instead in shale gas exploration and the LNG market?
The Southern Gas Corridor is not about preferring one supplier over another. It’s about diversification of supply and giving more choice to consumers. Realistically, Europe will still import gas from Russia and from Northern Africa in addition to Azerbaijan.
Historically Azerbaijan has always been a reliable partner for Europe, principally as an oil exporter. The Baku-Tbilisi-Ceyhan pipeline has been securely transporting oil since 2006 with Europe as its main destination. There is no reason to believe this would be any different with gas.
Today we see that there are important delays with LNG production affecting Europe and shale gas is unlikely to play a major role in the foreseeable future as there is still no clear indication of how much gas there is and when it may be commercially available.
Transporting gas by pipeline and, in particular, investing in the Southern Gas Corridor makes absolute sense for Europe from a diversification and security of gas supply perspective.
Gas is still a fossil fuel and we need to decarbonise our economy as soon as possible. Are these pipelines not locking us into a carbon future?
Natural gas is the cleanest of all fossil fuels and has a very important role to play in the European energy mix.
Today we see an increasing number of countries committing to a nuclear phase-out. In Germany alone nuclear energy makes up one quarter of the country’s electricity production - this leaves a big gap to fill. While I believe that renewable energies should be part of the energy mix, the reality is that alone renewables are unable to fill that production gap in the short to mid-term. Clearly, natural gas will be increasingly necessary as a bridge fuel, and also a destination fuel, helping Europe to achieve its goals on CO2 reduction.
My personal opinion is that natural gas will remain important in the long-term too. The energy demand will grow and Europe needs to meet it in the best possible way.
What about the environmental impacts of these pipelines? Have there been serious impact assessments? As the Caspian Sea is a very complex and fragile ecosystem, is there no danger for serious environmental impact?
As far as TAP is concerned we have taken the highest care in choosing the best route to ensure minimum impact in local communities and the environment. We have spent two years refining pipeline routes in Albania, Greece and Italy to ensure the least environmental and social impact possible, in line with the standards set by the European Bank for Reconstruction and Development and best international practise.
We worked in close cooperation with national and local authorities and residents in the three countries, consulted with more than 2,700 stakeholders to identify any social, environmental and cultural heritage risks. TAP carefully collected and analyzed their feedback and on this basis we have designed an optimal route, avoiding densely populated and environmentally sensitive areas such as Hotova National Park in Albania and protected Posidonia seagrass site in Italy, for example.
TAP has also started its official Environmental and Social Impact Assessments submission process in the first half of 2011.
Would TAP be in favour of merging all the different pipeline projects?
TAP has always been open for new partners to join. We especially would welcome an Italian or Greek partner, that could contribute to the further successful development of our project. At the moment, however, mergers are not likely to take place. All competing projects have made their proposals to the Shah Deniz consortium and we are waiting for their decision on the preferred gas transportation solution. Once the decision is made, I don’t exclude that talks on potential cooperation between the projects will take place. We also continue to remain open to other potential shareholders in SD including SOCAR, BP, and Total.
Generally, our approach has always been to build the Southern Gas Corridor one step at the time. We believe TAP is the best placed to be the first building block in line with available gas volumes today. Other projects such as Nabucco or IGI could follow once more gas comes on stream.
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