First Azeri gas reaches Greece and Bulgaria via TAP

Luka Dimitrov


LONDON (ICIS)–The 10 billion cubic metres (bcm)/per year Trans Adriatic Pipeline (TAP) has delivered first Azeri gas to Bulgaria and Greece, the pipeline operator announced on Thursday.

The pipeline is expected to increase gas imports for southeast Europe and diversify its supply portfolio, acccording to market participants.

The first gas has entered Greece via the Nea Mesimvria, the new interconnection point where TAP connects with the Greek national transmission network. Bulgaria will initially receive Azeri gas via the existing gas link between Bulgaria and Greece: the Kula-Sidirokastro pipeline. Later on, gas is expected to flow via the 3bcm/year Bulgaria-Greece Interconnector (IGB) that aims to start commercial operations by July 2021.

According to current supply contracts, TAP will deliver 1bcm/year to Greece, a similar volume to Bulgaria and the remaining 8bcm/year to Italy. The pipe is technically ready to run at full capacity from the start of operations, however, long-term capacity holders and Azerbaijan’s Shah Deniz field operators agreed a 15-month period to ramp up long-term contracted flows starting from an initial 40% of the capacity.

The field is operated by BP with a 28.8% share, with the split among other partners, including TPAO (19%), SOCAR (10%), Petronas (15.5%), LUKoil (10%), NIOC (10%) and SGC Upstream (6.7%) – a SOCAR (49%) and Ministry of Economy of Azerbaijan Republic (51%) subsidiary.

No data on the physical Azeri flows has been released yet, press officers at DESFA and Bulgarian gas grid operator Bulgartransgaz told ICIS.

TAP connects to the 16bcm/year Trans Anatolian Pipeline (TANAP) at the Greek-Turkish border and runs west to Italy via Albania, bringing volumes from the Azeri Shah Deniz II field.

Of total capacity to Italy, 95% has been booked under long-term contracts for 25 years and the remaining 5% will be marketed at spot auctions via the pan-European PRISMA platform, as mandated by Italian regulator ARERA.

On 15 November TAP’s operator said the pipeline began commercial operations and auctions for within-day, day-ahead and monthly products for delivery in December 2020 started to take place on PRISMA.


TAP is part of the Southern Gas Corridor and is designed to boost gas supplies to southeastern European countries through prospective interconnectors.

The IGB is designed to bolster Bulgaria’s gas supply diversity and end its dependence on Russian producer Gazprom.

In 2019, Bulgaria imported nearly 500 million cubic meters (mcm) of gas from alternative sources, about one sixth of its 3bcm annual demand.

The planned diversification has already born fruit for Bulgaria as its state-owned supplier Bulgargaz in March was able to negotiate a 40% price reduction with Gazprom under a new hub price-based formula. The decrease was helped a prior agreement between the European Commission and the Russian company. Under the previous long-term supply contract Russian gas coming into Bulgaria was priced on oil derivatives. In the new formula, the bulk of the component will be based on regional gas markets, although it is not clear which hub will be used.

According to TAP operator, Bulgaria will be able “to cover up to 33% of its total gas demand through TAP after the completion of the IGB”.

Teodora Georgieva, chief executive officer/executive director at project company ICGB told ICIS earlier this year that IGB’s launch is not entirely related to Azeri gas. “This is only one source of natural gas. We expect natural gas to be transported through the IGB from a variety of sources, including LNG,” she said.

The majority of the southeast European countries rely on Russian gas for its gas supply under long-term pipeline contracts. However, the development of several regional gas infrastructure projects also including 1.8bcm/year Bulgaria-Serbia gas interconnector, new liquefied gas terminal near Alexandroupolis and Croatia’s new KrK LNG terminal are likely to boost diversification routes.

Moreover, the 20bcm/year Balkan Stream gas pipeline is expected deliver the first gas from Bulgaria to Serbia this week.

“While the opening of Balkan Stream is Gazprom rerouting more volumes away from Ukraine, the start of TAP and the opening of the Croatia’s Krk LNG terminal reduce the Russian major’s position in the region,” said ICIS analyst.


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