Trans Adriatic Pipeline Gets $4.5 Billion EU Boost

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--One of the most important energy infrastructure projects in the European Union (EU)--the Trans Adriatic Pipeline (TAP)--has secured final financing of 3.9 billion euro ($4.5 billion).

The financing for TAP is the largest project finance agreed for a European infrastructure project in 2018. The 878-kilometre (km) long TAP pipeline will transport natural gas from the giant Shah Deniz II field in Azerbaijan to Europe as part of the $40 billion Southern Gas Corridor (SGC) project. The pipeline will connect with the Trans Anatolian Pipeline (TANAP) at the Turkish-Greek border at Kipoi, cross Greece and Albania and the Adriatic Sea, before coming ashore in southern Italy. The Southern Gas Corridor is a 3500-kilometer-long network of gas pipelines that the EU believes could eventually supply 20% of its gas needs. Once operational in 2020, the Southern Gas Corridor will offer a new source of competitively priced gas for the EU, reducing the region's heavy dependence on Russian gas. TAP's shareholders are BP (NYSE:BP) (20%), SOCAR (20%), Snam (20%), Fluxys (19%), Enagás (16%) and Axpo (5%).

TAP's initial capacity of 10 billion cubic metres (bcm) of gas per year is equivalent to the energy consumption of approximately 7 million households in Europe. In the future, the addition of two extra compressor stations could double throughput to more than 20 bcm. Financing has been supplied by a group of 17 commercial banks, alongside the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB).

Luca Schieppati, TAP's managing director, said: "With the financial close now achieved, TAP has reached another major milestone of the project's progress. TAP has voluntarily committed to comply with environmental and social standards required by the international financial institutions. With project financing now concluded, TAP can progress to the final completion of the project and delivery of Shah Deniz II gas in 2020."

Andrew McDowell, European Investment Bank vice president responsible for energy, added: "As the EU Bank, the European Investment Bank recognises the important contribution to improving security of energy supply in Europe that the Trans Adriatic Pipeline will bring and has provided 700 million euro ($800 million) for this, the largest energy project in Europe currently being built."

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