Italy Gives Final Approval of TAP
Italian Prime Minister Giuseppe Conte gave final approval of the Trans-Adriatic Pipeline (TAP) on Friday October 26. Conte noted the contractual constraints surrounding the agreement and said interfering in the process would involve “unsustainable costs of tens of billions of euros.”
Leading up to election in March 2018, the 5-Star Movement, one of the parties in the now-ruling coalition, vowed to abandon the TAP project if put in power. After taking power in June 2018, the government began to question Italy’s need for TAP. The Minister of the Environment Sergio Costa said in an interview in June 2018, “Given [our] energy policy, given falling gas demand, that project [TAP] today looks pointless.”
TAP is part of the Southern Gas Corridor (SGC) project that will bring Azeri gas to Europe via a 3,500km-long network of pipelines consisting of the extended South Caucasus Pipeline, the Trans Anatolian Pipeline, and TAP. The pipelines will span Azerbaijan, Georgia, Turkey, Greece, Albania, and come onshore in Italy. TAP will carry 10 billion cubic meters of gas per year to Italy from Turkey by 2020
TAP has faced criticism from Italian protestors and local governments regarding the environmental impact of the project. The pipeline is planned to make landfall in Lecce, municipality of Melendugno in southern Italy. TAP will come onshore near the popular tourist beach San Foca and will run beneath a grove of ancient olive trees. The primary concern for the protestors was the disruption caused by the construction and the environmental impact of the project.
The TAP consortium has taken measures to mitigate the project’s environmental impact. The consortium for the construction of TAP secured the temporary removal of 446 olive trees in Italy at the end of July 2018. The olive trees are being housed in a nursery to preserve their health. As the pipeline approaches the Italian coast, it will pass through a 1.5 km micro-tunnel that was constructed to ensure that the pipeline does not impact the local Posidonia seagrass and the Mediterranean Maquis onshore.
Now, the 5-Star Movement must renege on its promises because of binding contracts and agreements negotiated under the previous Italian administration. Deputy Prime Minister Luigi Di Maio said he learned how much it would cost to cancel TAP only after taking office and gaining access to certain official documents, but former ministers called him out, arguing that all documents were public.
Representatives from TAP project shareholders previously expressed confidence in TAP’s completion, despite the political hurdles in Italy. Both Deputy Vice President of Azerbaijan’s SOCAR Vitaliy Baylarbayov and Emily Olson, vice president of communications and external affairs for BP’s Southern Corridor, said that there was no backup plan for TAP if Italy did not approve the project. They were confident an agreement would be reached because, as Baylarbayov said, “Italy needs this gas.”
Natural gas demand is growing in Europe while domestic production is falling. Currently, the European Union imports 69 percent of its natural gas. Approximately 37 percent of the imported gas comes from Russia, roughly 33 percent from Norway, and 11 percent from Algeria. As domestic production falls, the EU will have to increase gas imports to fulfill this demand.
European Region Domestic Production 2008-2030
The realization of TAP is important to the energy security of Europe. The geostrategic importance of this project lies in its role in diversifying Europe’s energy supply while simultaneously creating competition in local energy markets. European energy companies such as Shell, Bulgargaz, DEPA, Uniper, and AXPO have already agreed to purchase gas from the SGC in an effort to decrease their dependence on monopolized prices—notably those resulting from Russian energy giant Gazprom’s advantageous market position.
TAP is progressing on schedule, despite the previous challenges. At the end of the third quarter of 2018, more than 80 percent of the TAP project was completed. Now with the Italian government giving approval, there should be no question of TAP’s on-time completion.