Interview with Ulrike Andreas – Director of Trade and Foreign Relations and TAP Manager for Albania
Works for the TAP pipeline, the largest project ever realized in Albania, worth 1.5 billion euros, will continue this year with the intensity of 2017. Ulrike Andreas, Director of Trade and Foreign Relations and TAP Manager for Albania, in a first media interview, claims that work on surface installations (compressor station, metering station and block valve stations) and the ground segment of pipeline will follow. This year, pipeline construction works will be displaced from the highest point in Skrapar, 1,800 m above sea level, in the depths of the Adriatic Sea. By 2020, the first gas from the Caspian Sea (from Shah Deniz’s gas field) is transported to Europe.
But, with the end of the works, the possibilities for Albania are not over. Mrs. Andreas says TAP is an opportunity to diversify energy sources and increase industrial production in Albania, cutting energy costs and supporting local businesses.
How much is the investment value of TAP?
Trans Adriatic Pipeline (TAP) is the largest foreign direct investment in Albania, worth about 1.5 billion euros. We expect the successful implementation of our project to encourage other foreign investors to come and invest in Albania. Construction works for the Albanian TAP segment, 215 km long, have continued with high intensity during 2017 and will continue at the same rates during 2018.
Pipeline construction is only part of TAP’s investment in Albania. In addition to pipeline construction, TAP has established very close relationships with communities along the project trail. Through our Social and Environmental Investments (ISM), we aim to improve their livelihoods and quality of life. TAP is investing more than 14 million euros in social and environmental projects. During 2017, TAP has invested in the complete reconstruction of several schools, creating modern learning conditions and increasing safety standards for more than 1,300 students in Bilisht, Strum and Grecalli. I have to admit that the inauguration of the “Thanas Ikonomi” school in October 2017 was one of the most beautiful moments of my career. To see the joy that this modern school brought hundreds of children makes us really proud to be part of Albania’s future.
Security is the number one priority for TAP and to convey this message further, we have developed information and awareness programs in schools and communities. Our trainings were attended by more than 8,000 people, of whom 7,000 were students. We look forward to these initiatives to increase road safety and everywhere in Albania.
TAP has also invested in infrastructure that promotes tourism development, such as panoramic platforms on the Osumi River canyon.
Moreover, TAP has supported a number of communities that have faced natural emergency situations. In January 2017, TAP provided food packages to about 1,300 households to face the harsh winter conditions. In August, we gave uniforms and firefight for the Civil Emergency Service. At the end of 2017, we helped farmers affected by the floods in Fier and cleaned and deepened the Osumi river bed to avoid future floods.
We are in constant talks with local communities and all levels of governance that socially and environmentally agreed investments, which have been jointly agreed, help to develop communities. I have the pleasure to confirm that even more social and environmental projects will be implemented during 2018, including another round of professional practices for talented students.
What was the construction performance in Albania in 2017 and what are the plans for 2018?
Construction works during 2017 for the land segment in Albania continued in accordance with our timelines. Works in the regions of Fier and Korça have almost been completed and most of the activity is already being developed in the Berat and Skrapar regions. In Albania, by December 2017, more than 77% of the TAP passage corridor was cleared and leveled; 72% of pipes are welded and 62% of the pipeline is lowered down into the duct.
The return of land in initial condition is also very important to us. In Albania, more than half the passage corridor, 116km, has returned to its original state and farmers are using the land again. Moreover, TAP has improved cadastral records in areas along the project trail, helping more than 12,000 households in obtaining property certificates.
Another important achievement during 2017 was the commencement of the works for the Compressor station in Fier, the Biliste station and the block valve stations.
Before I go to the activities for 2018, I would like to highlight two important achievements of last year. First, all tubes, 13,000, to be used for the land segment in Albania, have arrived at the Port of Durres and are stored in the main storage site. Almost all of TAP’s activity in the country has been conducted by local subcontractors and we are very proud that no incidents have been recorded.
Second, we have continued the works for the rehabilitation of the road infrastructure. The second phase of auxiliary road improvement, of about 134 km of roads, is about 75% complete. This is another important project that will bring benefits to communities for the coming decades.
As far as 2018 is concerned, works on surface installations (compressor station, metering station and block valve stations) and the pipeline’s ground segment will continue. This year, pipeline construction works will be displaced from the highest point in Skrapar, 1,800 m above sea level, in the depths of the Adriatic Sea. The maritime segment of the Adriatic pipeline is 105 km long and preparations for the works begin this year in Albania. The physical pipeline drainage on the Adriatic Sea bed is expected to start in 2019. In parallel with the construction of the pipeline, during 2018 preparations will be started for the operational phase of TAP, ensuring that customers will be offered the best services.
In 2019, when the works are completed, the pipeline will be tested and tested in such a way that in 2020, the first gas from the Caspian Sea (from Shah Deniz’s gas field) will be transported to Europe.
So put it differently, we have a lot of work ahead of us.
When will TAP start operations and what will be its contribution to the Albanian economy?
TAP is the largest direct foreign investment in Albania and is of strategic importance for Southeast Europe, especially for Albania. TAP puts Albania on the energy map and, as the IMF emphasized, TAP is an opportunity to diversify energy sources and increase industrial production in Albania, reducing energy costs and supporting local business.
TAP will boost other foreign investment in the country, while promoting stability.
TAP will help develop energy infrastructure in Albania and is currently working with Albanian institutions, the Ministry of Infrastructure and Energy, the Ministry of Economy and Finance and Albgaz to prepare the development of the Albanian gas market, according to the Master Plan of Gas . TAP can also facilitate the achievement of the Government’s goal of turning the country into a key juncture in South Eastern Europe for gas distribution.
TAP will contribute directly to Albania’s Gross Domestic Product through the millions of Euros tax that will be paid during the years of its activity. Moreover, many local businesses are offering their services as contractors or subcontractors and many individuals are employed during TAP’s construction. According to December 2017 data, in Albania we have directly employed TAP, our contractors and subcontractors more than 2,300 people. About 84% of these individuals are employed locally.
In another perspective, another important contribution of the project is decarbonisation. TAP will enable the use of a cleaner energy source, thus helping to reduce carbon emissions and protect the environment. Natural gas transported and powered by TAP can contribute to the decarbonisation of economies. In addition to Albania, Southeast Europe and the Western Balkans, the energy sector is heavily dependent on the use of fossil fuels for energy production. Gas requirements are expected to increase with the gradual reduction in the use of coal and wood.
TAP will help develop the energy infrastructure in Albania and is currently working with Albanian institutions, the Ministry of Infrastructure and Energy, the Ministry of Economy and Finance and Albgaz to prepare the development of the Albanian gas market, according to the Master Plan of Gas.
Do you have an agreement with the Albanian Government regarding the amount of gas it may need in the future?
Starting in 2020, TAP will provide a direct and cost-effective way for gas transportation, marking the opening of the Southern Gas Corridor with a strategic interest. TAP’s initial capacity is 10 billion cubic meters per year (bcm / a), but in the future, with the addition of gas resources, TAP can double capacity up to 20 bcm / a. It is important to remember that TAP does not own gas, we are building strategic infrastructure for its transportation. Thus, Caspian gas behavior in Albania depends on demand and supply.
When operational, TAP will conduct market tests every two years to provide more capacity (up to a total of 20 bcm / a in the future). These market studies will be undertaken in accordance with the guidelines adopted by the National Regulatory Authorities of Greece, Albania, Italy and the EU. All interested parties may submit their offers in accordance with the rules set out in these guidelines.
When the Master Gas Plan is completed, the Albanian Government will have a clearer idea about the country’s needs, so that it and Albgaz will be able to negotiate with gas providers.
TAP remains committed to contributing to the Master Plan of Gas through technical expertise, and will enable gas exit points for Albania. Thus, TAP will continue to monitor this process and will provide its support to the Albanian state, whenever necessary.
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