EU approves agreement between Greece and Trans Adriatic Pipeline consortium
The European Union (EU) regulators have approved the agreement between the Greece and the Trans Adriatic Pipeline (TAP), allowing the transport of the natural gas from Azerbaijan to Europe.
European regulators found that the deal complies with EU state aid rules, represents a step ahead in completing the Southern Gas Corridor project, which is intended to improve the security and diversify EU energy supply sources and routes.
European Commission commissioner in charge for competition policy Margrethe Vestager said: "Today's decision opens the way for a multi-billion infrastructure project in Greece."
"The investment incentives offered by the Greek Government are limited to what is necessary to make the project happen and in compliance with state aid rules."
Under the terms of the deal with Greece, TAP will be granted a specific tax regime for 25 years once the pipeline enters service.
With an initial capacity of 10 billion cubic meters of gas per year, the 870km pipeline, which is a part of the Southern Gas Corridor project, will be connected to the Italian market via Georgia, Turkey, Greece, Albania and the Adriatic Sea.
Energy Union vice-president Maroš Šefcovic, said: "The Energy Union framework strategy of February 2015 identified this project as a key contribution to the EU's energy security, bringing new routes and sources of gas to Europe."
The agreement between Greece and TAP was signed in June 2013 which was ratified by the Greek Parliament in December 2013.
TAP managing director Ian Bradshaw said: "Today's announcement is another important step towards the completion of TAP.
"It reinforces that the terms put forward for our project realization in Greece - including technical, safety, environment and social standards, permitting and land easement and acquisition - are entirely in line with level playing field principles.
"TAP continues towards construction and implementation of the project, benefiting from robust collaboration with the Hellenic Republic."
By 2020, the pipeline is expected to transport gas from the Shah Deniz II field in Azerbaijan to the EU. The five-year project is estimated to cost €5.6bn, including €2.3bn in Greece.
The pipeline project partners include BP, SOCAR and Snam each holding 20% stake while other partners include Fluxys with 19% interest, Enagás 16% and Axpo 5%.
Image: The agreement between Greece and TAP was signed in June 2013 and was ratified by the Greek Parliament in December 2013. Photo: courtesy of Trans Adriatic Pipeline.