Issue 2 | Feb. 2010 Welcome to the TAP's electronic newsletter!E-News is an electronic newsletter of the Trans Adriatic Pipeline (TAP) project. It is published quarterly to provide a rundown of TAP’s progress and any other relevant news. Each edition of e-News features a "thought piece", analyzing recent events or issues that are relevant to the Southern Gas Corridor. About the Trans Adriatic Pipeline (TAP) projectTAP is a pipeline project, measuring 520km in length, that will transport natural gas from the Caspian Sea and Middle East regions to Europe. The gas pipeline will start in Greece near Thessaloniki, cross Albania and the Adriatic Sea, and enter Italy near Brindisi. In Greece and Italy TAP will tie into the existing national gas systems. TAP is a joint venture of the Swiss EGL Group and Norway's Statoil. IN THIS ISSUE: News: TAP selects optimum route option in Italy and Albania » Country focus: Natural gas, energy security, and the opportunity for Greece » TAP's quarterly "thought piece": What gas crisis? » News: TAP selects optimum route option in Italy and Albania The Trans Adriatic Pipeline has completed the assessment of various pipeline route alternatives in Italy and Albania. The preferred route avoids densely populated areas and a protected natural reserve in Italy (Natura 2000 area with Posidonia sea grass) and Albania (Hotova National Park). The route assessment survey was conducted throughout the course of 2009 by TAP's environmental and technical teams and supported by international experts, who assessed  the environmental, social and technical impact of various pipeline route alternatives in Albania and Italy. More about Route Survey in Albania » and Meetings with Stakeholders in Italy » TAP's team in Albania, summer 2009 (Photos: Bevis Fusha): Identifying the survey area Conducting survey in the field Analysing flora and fauna   Meeting local residents The selection of the most optimum routing involved comprehensive consultations with stakeholders, including national and local authorities, local media and residents who live in the area. More than 150 meetings were organized by TAP at various levels. As part of this  stakeholder dialogue, TAP sought to engage transparently and openly. This  was well received by those TAP met with as they appreciated TAP’s efforts to engage them in the decision making process. More about Meeting with the Media in Italy »   The final pipeline route proposed by TAP will be presented to all stakeholders in Italy and Albania during the next few months. Next steps will include further fine tuning of the route and preparation of the detailed environmental and social impact assessments in accordance with EU legislation and international best practice. Christian Falck, Technical Director of TAP said: “Our team has spent many months investigating the most optimum route, that will have the least environmental, social and technical impact. Now we have a solid base from which to start our detailed Environmental and Social Impact assessment process later this year.” The route assessment survey in Greece is planned to start later in 2010. Back to top » Country focus: Natural gas, energy security, and the opportunities for Greece by George HatzidakisThe need to enhance energy security, reduce carbon emissions and provide affordable energy services is one of the greatest challenges facing Greece, especially in the current economic climate. George Hatzidakis, TAP’s Communications Consultant in Athens, explains why Greece must move swiftly to adopt legislation that will radically transform its domestic energy economy and focus on a combination of existing resources, new technologies and the facilitation of direct foreign investment. At a time when the Greek economy and its industries are being tested to the limit, measures to reduce the cost of energy are more important than ever. Currently, most of Greece’s energy needs are met by the production and use of lignite coal, which is a major pollutant, and oil, which is almost completely imported and accounts for about two-fifths of the country’s current account deficit, amounting to more than 10 billion euros a year. Greece's gas market is still developing, and major legislation, such as the network code for the management of the national gas transportation system and secondary legislation required under the Gas Law, has yet to be passed. With the increasing demand for gas, along with the construction of new power plants to meet energy demands, the need for progress is imperative. “The market is confronted with unnecessary problems which are caused by the lack of secondary legislation on natural gas and, more particularly, by the fact that the National Gas Transmission System does not register usage,” Deputy Minister of Environment, Energy and Climate Change Yiannis Maniatis was quoted as saying in a letter to the Regulatory Authority in Imerisia (Greek newspaper) in December 2009. “The delay … also creates problems, with negative consequences for the country.” As a result, the Deputy Minister has moved to speed up implementation of the law and has said that he expects a bill on the issue to be presented to parliament within the next few weeks. Natural gas is a vital component in the country’s energy supplies. With current technology, which allows for cleaner and safer fuel storage, transmission and usage, it could also be one of the cornerstones in a strategy that enhances energy security while reducing pollution and the threat of climate change. Natural gas represents about 20% of Greece’s primary energy consumption, according to state controlled gas company DEPA, but demand for gas is projected to increase steadily as it gains a larger market share in power generation and the industrial, residential and commercial sectors. Although Greece's gas demand by population size is significantly below that of other European countries, its projected annual growth rate for gas consumption is the highest among the pre-enlargement EU-15 states. Analysts and economists are certain of one thing: gas will play an increasingly important strategic role in Greece’s energy policies in the future. Progress in deregulating electricity supplies must therefore be accompanied by similar developments in the natural gas market. The country’s regulatory authority recently presented the Ministry with proposals for three important components in the country’s secondary natural gas legislation: - A License Regulation, which outlines obligations for players in the natural gas market, particularly suppliers and management of the National Natural Gas System. - The Gas Network Code, which describes conditions for user access to transportation and the installation of LNG, together with the process of extending guarantees between DESFA and users. - The Gas Supply Code, which defines the obligations of producers to supply consumers. Greece enjoys a unique position as a natural energy hub. It is directly adjacent to the major energy producers of the Middle East, North Africa and the Caspian, while the Aegean Sea and the eastern Mediterranean transfer a large proportion of the world’s annual energy needs. Michael Hoffmann, External Relations Director at TAP says: “The Trans Adriatic Pipeline project is certainly well placed to contribute to the objectives of Greece to bring Caspian gas to Europe.” Greece imports more than 70 per cent of its energy and the only reliable domestic source is lignite, which accounts for some 85 per cent of domestic electricity production. Greece has pledged to increase its use of renewable energy sources, such as solar and wind power, and has said it expects investments in the field worth 5 billion euros by 2020. In time, Greece may yet become a near-independent energy producer, but for now, the issue of energy security is still an important one. Oil, which is imported, accounts for about 60 per cent of yearly energy consumption, while natural gas still accounts for less than 10 percent, although that figure is increasing. Through a series of bilateral agreements, Greece imports 80 per cent of its natural gas from Russia and Turkey and the rest from Algeria. Analysts point out that without any significant increase in domestic energy production, Greece will have to rely on ventures with foreign corporations and other states if it is to become a regional hub and transit route for the ever-increasing number of energy networks. From Greece’s point of view, the presence of pipelines transferring gas to western European nations is also beneficial because it secures a steady flow of gas into the country. Investors are interested in the Greek gas market, with many energy groups looking to play a role in the transit of gas through the country. At the same time, almost all Greece’s neighbours already have or are hoping to finalize bilateral contacts for the future supply of natural gas through Greece for their own networks. A number of oil and gas pipeline agreements  that rely on Greece as a major partner are already in place. Amongst the number of gas pipeline projects that exist, the Trans Adriatic Pipeline project can be viewed as supporting Greece in elevating its natural geographic and economic role in south-eastern Europe and transforming the country’s role from that of a sole importer to a regional energy hub. The future seems bright but political initiatives to secure future agreements are essential, otherwise Greece may be looking at more than just lost opportunities. Too much time has been lost during the past five years, during which the country’s energy market should have been officially deregulated. Vested interests, bent on maintaining a de facto energy monopoly, have delayed implementation of the much-needed regulations that would free up the sector, to the detriment of the economy as a whole. As a result, the EU is keeping an eye on creating fair and transparent market conditions to, among other things, encourage competition and direct foreign investment. Greece now has a unique opportunity to align itself with these objectives. In cooperation with market players, natural gas could be a focal point for the creation of a robust yet flexible regional market. It is no accident that Greece plays an important role in the formation of the Southern Gas Corridor for the supply of gas from Central Asia to Europe, but a proper regulatory framework is essential if this goal is to be achieved. George Hatzidakis is TAP’s Communications Consultant, based in Athens, Greece. George has worked as a reporter and journalist for more than 20 years in Australia and Greece for both international and local media outlets. He has covered global and domestic business, economic, company and political sectors for Bloomberg News, Reuters and Dow Jones Newswires, as well as for radio, magazines and newspapers. With degrees in International Relations and Journalism, George also has a background in government and business facilitation having been the Press and Information Officer with the Australian Embassy in Athens in the run up to the Sydney 2000 Olympic Games and the Athens 2004 Games. Back to top » TAP’s quarterly “thought piece”: What gas crisis? by Arve ThorvikEurope has somehow avoided a gas crisis this winter due a strange combination of many factors. Considering uncertain gas demand in the future, why should TAP keep pushing and insisting on building yet another pipeline? Arve Thorvik, Senior External Relations Advisor of TAP, believes there are very good reasons to continue doing just that. With any luck, Europe should be spared a gas crisis this winter. A strange combination of factors has helped to minimize the effects of freezing temperatures on the continent: the financial crisis is not yet history – production fell and unemployment soared – while a Moscow-friendly candidate has won the Ukraine presidential election. So falling gas demand and a decreased appetite for conflict in both Kiev and in Moscow saw the January payment deadline pass without major incident. At the same time, Ukraine has completed what international observers described as an "impressive display of democratic elections". All of which augurs well for the easing of tensions along this particular pipeline to Europe. In its latest World Energy Outlook, the International Energy Agency (IEA) talks of a 200-bcm "glut of gas" by 2015. That should be more than enough to scare investors away. In addition, according to the forecasters in Paris, unconventional gas resources (shale gas), will account for a very large share of the US market (around 300 bcm or 35 % of the market) by 2030, thus squeezing out imports of LNG. No wonder then, many would say, that Gazprom and its partners are dithering on their decision to invest in the world’s largest offshore project, the Shtokman field, which is supposed to supply pipeline gas to Europe through Nord Stream and LNG to the US. So, why bother? Why should we keep on pushing and insisting on building yet another pipeline? There are, I believe, four good reasons. First, the need to get new Caspian gas to Europe after 2015. There are basically only two ways of solving this. Either the existing South Caucasus Pipeline (SCP), which brings gas from the shores of Baku to Turkey, is extended into the EU markets, or the gas has to be routed through Russia. There is a clear political will in Europe and in the US to avoid the second alternative. Second, as gas prices even out and come under sustained pressure as a result of the predicted “glut”, producers and shippers alike need to find the cheapest possible way of bringing the gas to market. Trans Adriatic Pipeline (TAP) is definitely one such solution. Third, while the same IEA forecast sees a fall in oil demand from the OECD, it predicts an increase in gas demand over the years following the "glut", enough to make oil and gas equal contributors to the world energy supply by 2030. Fourth, there is the climate change angle to all this. Notwithstanding the downgraded demand projections and the crisis that has not (yet) happened, the world will have to continue to survive on a fossil fuel diet for decades to come. The OECD area will have to compensate for rising coal use in China and India by switching to the greenest possible fossil alternative – gas. If there is one gloomy truth emerging from the none-too-successful Copenhagen summit, it is this: while we wait for renewables to become cheaper and the magic formula to be invented, we must make fossil fuel as green as possible. Effectively, this means switching fuels, imposing a drastic reduction in gas flaring, and increasing carbon capture and storage. Building a pipeline is partly a technical and partly a political issue. Like other rival and complementary projects, the TAP, therefore, is not restricted to engineering issues. This means we have to communicate with the world around us regarding these "megatrends". It also meant, for example, that from the moment we made the obvious decision to cross the Adriatic from the shores of Albania, we had to start caring about its ramifications for a country that is the second poorest in Europe: about its national parks, about its energy needs, about the fair treatment of landowners along the line, and about the local content we can provide when we start the construction phase. This is why a pipeline, like an artery in the human body, is of major relevance to a country’s infrastructure. TAP is ready to accept its duty of care and to build that artery in the most responsible way possible. Arve Thorvik is a Senior External Relations Advisor with the Trans Adriatic Pipeline project, based in Brussels, Belgium. Arve has more than 30 years experience in foreign relations and European Union Affairs. Arve studied political science and entered the Norwegian Foreign Service in 1973. During his 16-year foreign service tenure he worked on various international assignments in Lagos, Geneva and Washington DC. Following this, Arve worked in senior management positions in Norwegian industry associations for eight years. In 1997 Arve joined StatoilHydro as Senior Vice-President for Health, Safety and Environment (HSE) at headquarters in Stavanger. In 2004 he established and developed StatoilHydro’s European Union Affairs Office in Brussels. Back to top » If you have any questions about this newsletter or about the Trans Adriatic Pipeline project, please, send us an email at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it Enquiries from the media should be forwarded to This e-mail address is being protected from spam bots, you need JavaScript enabled to view it Would you like to receive regular updates about TAP? 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