'Huge collaboration will be required to move Shah Deniz project forward'

The decision of Azerbaijani Shah Deniz gas condensate field development will start the cooperation among the all players in the Southern Gas Corridor, the Managing Director of the Trans Adriatic Pipeline (TAP) Kjetil Tungland believes. In interview to Natural Gas Europe Tungland said that TAP has made a really strong proposal to the Shah Dniz consortium.

"We hope the decision will be made very soon, so that all players in the Southern Gas Corridor can start cooperating instead of competing. Obviously, a lot of collaboration will be required to move such a complex project forward," Tungland said.

TAP is one of the projects within the Southern Gas Corridor, which is designed to transport gas from the Caspian region via Greece and Albania and across the Adriatic Sea to southern Italy and further into western Europe.

On Oct. 1, TAP along with the other Southern Gas Corridor projects (Nabucco and ITGI) submitted the final proposals to the Azerbaijani side, which will review them in accordance with the previously announced criteria. The decision on the preferable transportation route is expected to be made in the first quarter of 2012.

Tungland said that as soon as a decision is made, TAP can proceed with the next steps in project's development. "We are fully on schedule and will be able to start operations in time for the first gas from Shah Deniz," Tungland said.

Talking about the advantages of TAP project over the other pipeline projects within the Southern Gas Corridor, Tungland said that TAP is the shortest pipeline route for transporting Caspian gas to major European markets.

"This is also the most efficient use of capital and is the basis of the strong commercial proposal that we made to the Shah Deniz consortium who are developing the natural gas field in Azerbaijan," Tungland said.

TAP also benefits enormously from having leading energy companies as the shareholders, he said. TAP's shareholders are EGL of Switzerland (42.5 percent), Norway's Statoil (42.5 percent) and E.ON Ruhrgas of Germany (15 percent).

According to Tungland, capital is the third advantage of the project and gives TAP tremendous financial strength. "We are backed by shareholders who are very strong financially, with a total market value of more than ˆ100 billion. Being privately financed, TAP will be in no need of any grants or subsidies from governments," he said.

All these advantages make TAP really stand out from the competition as the best possible solution to bring Shah Deniz gas to market, Tungland believes.


/Trend/