Friday, October 24, 2014

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TAP Pushes its Plans in Greece

A high level delegation representing the Trans-Adriatic Pipeline consortium met with Greek officials, including the alternate Minister for Energy Makis Papageorgiou, in order to push forward its plans for the project, which has gained a momentum after the developments of the past few months.

TAP's officials, Rikard Skoufias country manager for Greece, and Michael Hoffman, Director of External Affairs and Communications, stressed first and foremost the importance of official support for the project in order for the Southern Corridor to be realized through Greece.

In that respect they relayed their views that a tripartite declaration by the governments of Greece, Italy and Albania is needed, in order to show a solid political support. Already the latter has agreed to back up TAP, so as to be included in the Southern Corridor axis and bolster its energy security.

Moreover TAP is open to an agreement by which a Greek partner, namely DEPA would be accepted as a partner in the consortium and information was made known, that already four meetings with DEPA officials have taken place recently upon that subject.

Furthermore, TAP made a surprise announcement by stating that a Greek company "Greek pipe works S.A" has been pre-selected the estimated 500 million Euros contract for the construction of the pipeline. Should TAP is awarded the Southern Corridor route, this company which currently has a turnover of 260 million Euros (2011), would see its sales multiplying, thus boosting local industrial production.

TAP is also talking in parallel with ENEL in order to partner with it and secure Italian support. In that respect on the 15th of August the market study that will determine the market natural gas potentials in the long-term in Greece, Albania, Italy would be ready, so as to be able to then proceed into solid cooperation with individual companies such as ENEL and DEPA.

TAP officials were placed on the defensive last week follwing Azerbaijani Energy Minister Natiq Aliyev’s statement favoring the rival Nabucco West project in the contest to carry Caspian gas to Europe. Informed sources told Natural Gas Europe that the Minister's comments reflected his personal point of view and not the position of the Azeri government or of the Shah Deniz consortium.

Skoufias noted that "Competition with Nabucco West is tough and we are doing our best...by October 2012 we should expect a positive and definite answer by the Greek government". It is interesting to note that the Italian minister of development Corrado Passera has indirectly sided with TAP, by stating "Italy needs foreign direct energy investments that will be self-financed". TAP believes that Italy and Albania are on their track.

In receiving the comments, the Greek energy ministry deferred to provide definitive support.

Minister Papageorgiou told TAP's officials that any answer will come after a final decision by the Greek Prime Minister's office and after consultation with the Italian government and the EU. Moreover, the Greek side has certain terms it wants to secure, such as the inclusion of DEPA and the securing of favorable long-term gas deliveries.

What’s more important though, is that the Greek government tends to believe that actually TAP will be the winner of the Southern Corridor route, thus they want to raise the bar of their expectations for as much as possible supplies of gas, in as less as possible prices, along with a sizeable percentage for DEPA in the consortium, which some local insiders point out that it should be around 20%. 

Athens is also anxious to view of the Italian decision, which has in parallel been promoting the South Stream project, another pipeline where DEPA is also involved. Lastly, DEPA is also looking to extract as many advantages as possible through its - indirect for the moment- involvement in the offshore natural gas reserves in Cyprus.

Recently the ex-President of USA, Bill Clinton paid a visit to Athens, where reliable sources indicated that Noble Energy's activities in the Eastern Mediterreanean and plans for Southeastern Europe were discussed, in light of Washington's increased interest. DEPA's officials were also consulted as the potential partners in such mid-term plans.

The main question that arises is will Greece be ready to take a definite decision by the last quarter of 2012 and if so, what will be the TAP's consortium's initiatives in order to firmly secure its position.

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