TAP pipeline opens for business with commercial gas operations

MILAN, Nov 16 (Reuters) - The Trans Adriatic Pipeline (TAP),
which will bring Azeri gas into Italy, has kicked off commercial
operations, more than four years after construction work first
began, TAP said.

The pipeline, whose shareholders include Snam and
BP, said it had begun to offer capacity along the 878 km
line which will be able to carry 10 billion cubic metres of gas
per year.

TAP is the final leg of a $40 billion project named the
Southern Gas Corridor, which is a cornerstone of the European
Union’s energy security policy to wean the bloc off Russian gas.

Opposition from local and environmental groups had caused
delays to the 4.5 billion euro ($5 billion) pipeline but first
gas is now expected to start flowing by the end of this year.

"It is the first delivery of contracted Azerbaijani gas
beyond Turkey, it provides a fourth gas import pipeline corridor
for the EU, it boosts diversification and energy security," said
Wood Mackenzie Research Director Murray Douglas.

TAP, work on which started in 2016, was built to be able to
transport double its initial capacity. But the transition
towards cleaner renewable fuels to de-carbonise economies has
raised questions about demand and costs.

"More Azerbaijani gas had been the initial hope to fill TAP
expansion, but this is looking increasingly unlikely because of
challenging project economics and better-positioned supply
alternatives, including Russian gas," Douglas said.

Besides Snam and BP, TAP AG shareholders include
Azerbaijan’s SOCAR, Fluxys, Enagás and Axpo.
($1 = 0.8456 euros)
(Reporting by Stephen Jewkes; Editing by Kirsten Donovan)