At present, only 10 billion cubic meters per year of gas reaches Europe via TAP, which is ‘modest’ volume measured against overall European gas demand, Elshad Nasirov, SOCAR vice president or investment and marketing, said on an Atlantic Council webinar, report.az informs, referring to the S&P Global Platts.
"It’s not a game changer from a volume point of view, but it is a game changer from a supplier diversification perspective. This is its unique energy security and geopolitical contribution," he said.
He noted that it had helped to increase liquidity on the Italian Virtual Trading Points (PSV) market.
"The Italian market had long been illiquid, and prices at PSV were higher than at other hubs in continental Europe," he said.
"Liquidity is improved, meaning PSV assessments are now a more reliable guide to the Italian price," he said.
TAP accounted for just 3.4 percent of the Italian gas supply mix in January, according to data from S&P Global Platts Analytics.
In the future, SGC could also flow gas to the Balkan region.
The Western Balkans covers countries such as Albania, Bosnia and Herzegovina, Montenegro, North Macedonia, and Kosovo.
The TAP transports natural gas from the Caspian region to Europe by connecting to the Trans Anatolian Pipeline (TANAP). TAP travels through Greece and Albania, under the Adriatic Sea, and comes ashore in Italy.
The operational capacity of the TAP is set to equal 20 bln, while TANAP's will hit 31 bln, with an overall capacity of the South Caucasus pipeline reaching 30 bln cubic meters after the expansion. After the expansion, the SGC will also provide Balkans with respective services.
The SGC comprises the key components as follows: the South Caucasus Pipeline Expansion Project (SCPX), the Trans-Anatolian Natural Gas Pipeline (TANAP), and the Trans Adriatic Pipeline (TAP).
In 2021, Georgia is set to receive 1.014 bln cubic meters of gas in exchange for allowing Azerbaijani gas to pass through its territory. This year, the volume of additional gas for Georgia will amount to 508.7 mln cubic meters, with this surpassing the volume of gas (888.6 mln cubic meters) Georgia was supplied by in 2020 via the SGC by 126 mln cubic meters.
Azerbaijan put forward the initiative to create the Southern Gas Corridor. Azerbaijani leader Ilham Aliyev said that they drew up the Energy Map for Eurasia. In his words, Azerbaijan assumed the responsibility of funding the project by building three interconnected 3,500 km pipelines, with this enabling European customers to get Azerbaijani gas. Aliyev stressed this is beneficial for both Europe and Azerbaijan.
In 2021, Azerbaijan's giant Shah Deniz field gas started flowing to the EU. The Southern Gas Corridor (SGC) aims to develop gas supply routes passing through the Southern Caucasus and Turkey to supply gas from the region to Europe. The Georgian PM Giorgi Gakharia defined this fact as a tremendous step forward.
Georgia is a host country in the SGC, with this implying that following the corresponding agreements, Georgia will get the SGC gas at a considerably reduced rate. The options contract enables the country to get around 5% of gas passing through it annually. The deal is valid before 2066. The additional gas purchase and sale agreement is in force until 2026. In accordance with the agreement, Georgia will receive around 500 mln cubic meters of gas annually.
