Thursday, November 24, 2011

TAP, Albania start talks on pipeline agreement

* Albania first to start talks with TAP

* Deal in compliance with Azeri gas project

TIRANA Nov 23 (Reuters) - Albania on Wednesday became the first host government to start talks with the Trans Adriatic Pipeline (TAP), aimed at transporting Caspian to Italy through Greece and Albania.

The TAP consortium -- Norway's Statoil, Germany's E.ON Rurhgas and Swiss EGL -- aims to build a 1.5 billion euro pipeline that would carry 10 bcm of Caspian gas a year along a 520-km route.

"The parties endeavour to conclude the negotiations in compliance with the overall time table governed by the Shah Deniz Stage II project in Azerbaijan," Albania and TAP said in a statement.

Albania's Economy, Trade and Energy Minister Nasip Naço said the pipeline would play a key role in meeting the needs of the energy-starved Balkan country.

The TAP project so far lacks intergovernmental approval between the three countries it would pass through, although it was included in an agreement signed in 2009 between Italy and Albania.

This has opened up the project to criticism that its main partners are not serious about the its final development and instead seek to increase price competition for Shah Deniz II's gas exports to Europe.

TAP is expected to make its final investment decision in 2013, in line with the schedule of Azerbaijan's Shah Deniz II gas field. At this point, construction would take approximately three years.

Security of supply is a pressing issue for nations in southeast Europe, which were hit hard by a dispute between Ukraine and Russia in the winter of 2009 that cut off deliveries amid freezing temperatures. (Reporting By Benet Koleka, Editing by Michael Kahn)

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