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Natural gas pipeline TAP to launch market test in a month

04 May 2012 16:13:57 | esgm

Interested parties will be able to pursue capacity available on the Trans Adriatic natural gas pipeline (TAP) in slightly more than a month at the latest, after the general guidelines for the capacity allocation procedures have been approved by the Italian, Greek and Albanian regulators, it emerged on Thursday.

The actual capacity allocation rules will be released only after the implementation of a 'market test' phase, which will start with a call for expression of interest, regulators said.

Expression-of-interest phase

The market test proposal will be put forward within 20 days and will then need to be approved in 15 days by all the regulators involved.

One day after the approval of the proposal, the expression-of-interest phase will officially kick in. At that stage, participants will be told when the pipeline will be operational, the final route, any technical specifications, any connection to other infrastructure in the three countries involved and provisional details on the investment costs.

Those who express interest for TAP capacity will not be bound to ook the capacity afterwards, and TAP will not be obliged to sell it, the document approved by the regulators said.

Once the expression of interest phase is completed, the operator will be able to launch the second phase - the actual booking of long-term capacity under ship-or-pay contracts.

This will allow the TAP consortium to make the final investment decision on the infrastructure.

Third-party access exemption

Only after the expression-of-interest phase is completed can the involved regulators decide on the exemption of third party access to the pipeline, the document approved reads.

This will be subject to a report that the pipeline operator will issue 15 days after the completion of the expression-on-interest phase. Regulators will have 30 days to respond and comment to the report, saying whether the exemption can be granted.

However, if they are not happy with the amount of information provided in the report, national regulators can ask for more details from the pipeline operator.

An agreement to grant the exemption may also be subject to the operator being able to expand the pipe and to offer additional capacity in the booking phase.

Harmonised network code

The operator will establish a network code for capacity allocation rules to be applied to the whole TAP route.

In general, however, the TAP operator anticipated that the procedure to allocate capacity will be based on an auction mechanism. They also added that there will be a use-it-or-lose-it principle in place, with available to go on a secondary market.

The TAP project has been favoured over its rival Interconnector Turkey Greece Italy (ITGI) project to receive 10 billion cubic metres (Gm³)/year until 2017 from the Azerbaijani Shah Deniz II field (see ESGM 20 February 2012).

The Shah Deniz consortium is due to make a decision in June on which proposed pipeline project it might choose. A final decision will come next year, when the Azerbaijani consortium makes its final investment decision.

The current stakeholders in the TAP project are Norwegian Statoil, Swiss EGL, and German E.ON, however Italian utility Enel also said it could be interested in entering the project (see ESGM 3 May 2012).MM

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