ITGI: The most competitive project for Azerbaijan gas supplies to Europe

Wed 29 December 2010 05:43 GMT | 09:43 Local Time

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ITGI pipeline project is the shortest way for Azerbaijan gas supplies to Europe.

The ITGI pipeline project traversing Turkey, Greece and Italy, is the shortest way for Azerbaijan gas supplies to Europe and commercially speaking is also the more viable.

This was the main conclusion of the conference organized in Brussels by members of the European Parliament and whose guest speaker was Commissioner of Energy Mr. Gunther Oettinger. At the conference, whose theme was “The South Corridor” and its implications in the diversification of gas supplies to European markets, also participated the Turkish ambassador to the EU Mr. Selim Kuneralp, the representative of Eurogas Mr. Simon Blakey and Mr. Louis Bono, member of the USA’s Parliament Representation in charge of energy issues. On behalf of the companies involved in the ITGI’s project took the floor Mr. Umberto Quadrino of Edison (Italy) and Mr. Charis Sachinis of DEPA (Greece).

The conference started with the speech of the Greek MP Ms. Annie Podimata (Socialist Party) and of the Italian MP Ms. Patricia Toia (Democratic Party). Ms. Podimata said that the ITGI project is very mature and offers tremendous added value in the EU, also insuring its energy security. The Commissioner of Energy Mr. Oettinger required the commercial sustainability of the project and said that energy infrastructure is the key to all energy goals: from security of supply to the proper functioning f the internal market. It is therefore essential for the EU to pull the necessary resources and accelerate the realization of EU priority projects.

The Commission defines a limited number of EU priority corridors for which urgent development is needed to deliver on EU policy goals of competitiveness, sustainability and security of supply by connecting those member states which are almost isolated from other European energy markets, by massively strengthening existing cross-border interconnections and by integrating renewable energy into the network. Based on these pre-defined corridors, concrete projects of “European interest” will be identified in 2012, which should benefit from EU financing and building permits, including a time limit for final decision while ensuring full respect of EU law, in particular environmental legislation and public participation. In planning and implementing these projects, the Commission favors regional cooperation between countries. Referring to the Nabucco project, the Commissioner said it is compatible with the other projects and they all have the potential to be an important element of the southern gas corridor.

The Turkish ambassador to the EU stressed the close collaboration between Greece and Turkey for the development of the ITGI project and said that the natural gas networks of the two countries are connected and used to ship gas from Shah Deniz into Greece, avoiding Russia. He also emphasized that ITGI and Nabucco projects are not competitive but complementary. From his side, the American representative argued that the American government is in favor of the diversification of the European sources of energy and said that the best solutions are those with the best chances of commercial viability.

The CEO of the Italian company Edison underlined the maturity of the ITGI project and said that everything is in order to help the transportation of all the available gas in the region. DEPA’ s CEO gave a deep analysis of the importance of the ITGI project and said that, in relation with the Interconnector Greece-Bulgaria (IGB), the pipeline is ready to provide Europe via the Balkans and Italy with natural gas. Mr. Sachinis also mentioned the investment threats of the project and concluded that all the partners of the project are ready to transform the uncertainties to realities. Mr. Simon Blakey of Eurogas mentioned the bad conditions of the natural gas market and said that gas pipeline projects are usually attached to big, long-term supply contracts.

ITGI

In June 2010, Italy, Greece and Turkey signed a Memorandum of Understanding (MoU) that should lead to the joint construction of a natural gas pipeline called ITGI (Interconnector Turkey-Greece-Italy). When completed, this project will transport Middle Eastern and Caspian gas resources to south and south-eastern Europe. The 800 km-long pipeline (with an estimated capacity of 10 billion cubic meters per year) has been under discussion between the directly interested states since 2002, with the active support f the EU and its member countries. The purpose of the gas Interconnector is to diversify energy (namely natural gas) resources and routes in an effort to upgrade the EU’s energy security. If carried as planned, the ITGI will be completed by 2015.

ITGI  pipeline comprises the following sections:

-The national Turkish gas grid, which will be upgraded in order to enable the transit of the volumes to Greece and Italy

-The Interconnection Turkey-Greece (ITG), completed in 2007, with a transport capacity of about 11,5 billion cubic meters of gas a year

-The Interconnection Greece-Italy (IGI), to be built. It will have a transport capacity of 8 billion cubic meters of gas a year and 800km long. The pipeline includes two sections: IGI Poseidon (200km offshore pipeline across the Ionian Sea, under development by IGI Poseidon SA, a joint venture by Edison and DEPA), and IGI Onshore (600km onshore, under development by Desfa, a company controlled by DEPA and owner of the Greek Transmission System)

-The Interconnection Greece-Bulgaria (IGB) will have a transport capacity of 3-5 billion cubic meters of gas a year, will be 160km long and will connect Komotini (Greece) to Stara Zagora (Bulgaria).

The ITGI represents a new route of supply for the European energy system, able to enhance security and increase the competition on the EU’s gas market. The EU acknowledged the strategic relevance of the ITGI as a Project of European Interest and included it among the Southern Gas Corridor Projects of the announced European Recovery Plan with a proposal of 100 million euro of financing. The IGB pipeline was included in the same plan with the possibility of financing of 45 million euro.

Christos Trikoukis
European Business Review (EBR)

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