Caspian Report - Issue: 07 - Spring 2014

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Matteo Verda 30 In the end, the viability of TAP’s expansion will depend on the possibility of symmetrically expanding the export capacity of the Italian gas network, in order to supply Northern European markets. If realised, the impact If realised, the impact of TAP’s expansion will be a further strengthening of the relevance of the Italian gas network as a transit route, with relative benefits for Snam Rete Gas. of TAP’s expansion will be a further strengthening of the relevance of the Italian gas network as a transit route, with relative benefits for Snam Rete Gas. Clearly, additional import capacity will also improve the level of security of the Italian supply. The relevance of TAP’s expansion could be very different in the case of a structural reduction of flows coming from another source, due for example to enduring political instability in Northern Africa and lack of upstream investments in the region. In this case, TAP’s additional capacity would replace missing volumes on a permanent basis and the Azerbaijani gas would substantially increase its share in the Italian supply. TAP’s current projects include only one expansion up to 20 bcm per year. Despite its relevance for the countries directly involved, and especially Italy, without a further expansion TAP’s impact at EU level is bound to remain limited. At the moment, constraints in the upstream and a weak demand on the final markets are limiting the viability of the second line. However, if the pipeline will be upgraded and its routes will include the Italian gas network, the impact for the Italian economy will be absolutely positive. Final remarks All in all, TAP’s impact on the Italian economy is consistently positive. During the construction period, it will provide small but still tangible positive effects on the territory where the infrastructure will be built (80 million euros per year), which will partially continue after its commissioning (12 million euros per year). Once operating, it will increase competition among the operators on the final markets, in theory reducing wholesale and final prices. In the case of development of export capacity on the Italian gas system, TAP will provide the necessary volumes to preserve a security buffer on the Italian gas network and therefore allow significant export flows without endangering the stability of the final offer on the Italian market. Therefore, TAP will be essential for the export flows which will allow Snam Rete Gas to collect estimated 200 million euros as transit fees. If the export capacity will not be realised on time, Azerbaijani gas will flood final market with competitive natural gas, further reducing final prices. Potential savings for the final consumers will be 300 million euros for each percentage point of price reduction. TAP’s positive impact on the Italian economy is increased by the fact that the investment is completely covered by private capitals or, at least, not by the Italian public spending. Therefore, the Italian economy is benefitting from
more security, more competition and potential price reductions without resorting to the economic distortions caused by taxation. Besides its measurable economic impact, TAP’s construction will improve the Italian energy security. TAP will indeed provide an effective diversification of the Italian gas supply, considering both to the origin of the gas and to the route of the pipeline. For a country which imports 90% of its natural gas consumption, such diversification is a relevant achievement, whose economic value is difficult to assess. But which probably represents the most important contribution of TAP to the Italian economy. 31 CASPIAN REPORT, SPRING <strong>2014</strong>
Page 1: caspian published by caspıan strat
Page 4 and 5: CASPIAN Report 2 The urgent need to
Page 6 and 7: caspian CASPIAN Report 4 06 AHMET Y
Page 8 and 9: AHMET YUKLEYEN 6 Afghanistan’s Un
Page 10 and 11: AHMET YUKLEYEN 8 In Afghanistan’s
Page 12 and 13: AHMET YUKLEYEN 10 want to face the
Page 14 and 15: AHMET YUKLEYEN 12 In short, ANF has
Page 16 and 17: US President Barack Obama holds a b
Page 18 and 19: AHMET YUKLEYEN 16 The second big ch
Page 20 and 21: AHMET YUKLEYEN 18 beards and long t
Page 22 and 23: Anti-war demonstrators rally near t
Page 24 and 25: Matteo Verda 22 CONTRIBUTION OF Tra
Page 26 and 27: Matteo Verda 24 TAP will be a 760 k
Page 28 and 29: SHAREHOLDER STRUCTURE OF TAP Matteo
Page 30 and 31: Matteo Verda 28 Azerbaijani gas wil
Page 34 and 35: Aura Sabadus 32 Southern Gas Corrid
Page 36 and 37: Aura Sabadus 34 Russian-backed riva
Page 38 and 39: Aura Sabadus 36 The criticism has g
Page 40 and 41: Aura Sabadus 38 other large rival t
Page 42 and 43: Aura Sabadus 40 player by selling v
Page 44 and 45: and possibly further to Europe, alt
Page 46 and 47: Aura Sabadus 44 The Southern Gas Co
Page 48 and 49: Davide Tabarelli 46 Environmental e
Page 50 and 51: Davide Tabarelli 48 evaluate potent
Page 52 and 53: View of the old town Ostuni, Puglia
Page 54 and 55: Davide Tabarelli 52 of some 200 mil
Page 56 and 57: Iran Nuclear Negotiations and Turke
Page 58 and 59: Mehmet AkIf Okur 56 posal stated th
Page 60 and 61: Iranian President Hassan Rouhani an
Page 62 and 63: Mehmet AkIf Okur 60 The steps that
Page 64 and 65: Mehmet AkIf Okur 62 It is possible
Page 66 and 67: Frank Umbach 64 Strategic Perspecti
Page 68 and 69: Frank Umbach 66 Many of the shale g
Page 70 and 71: Frank Umbach 68 are considerably hi
Page 72 and 73: Frank Umbach 70 The UK government i
Page 74 and 75: With Russia’s President Vladimir
Page 76 and 77: Frank Umbach 74 During the last thr
Page 78 and 79: Frank Umbach 76 approved by the gov
Page 80 and 81: Shale gas drilling rig. Frank Umbac
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THE IMPORTANCE OF TAP FOR ITALY SOM
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AntonIo SIleo 82 the end of 2011, g
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AntonIo SIleo 84 Power generation o
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ily limited because of the emergenc
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AntonIo SIleo 88 ductant chemical r
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AntonIo SIleo 90 emerge as a signif
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Radu Dudau 92 Romania’s Energy St
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Radu Dudau 94 countries pay for Rus
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Radu Dudau 96 This industry, howeve
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Radu Dudau 98 de facto monopolies i
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Radu Dudau 100 In October 2013, the
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Radu Dudau 102 In spite of the ling
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caspian
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Why World Oil Prices Should Be High
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Luay Al-Khatteeb 108 for $1 of reve
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emın akhundzada 110 Turkey as an E
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emın akhundzada 112 markets. Given
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emın akhundzada 114 First, it shou
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FatIh Ozbay 116 Discussions about V
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FatIh Ozbay 118 The Black Sea is a
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FatIh Ozbay 120 these two countries
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FatIh Ozbay 122 Montreux is quite s
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MUbarIz Hasanov 124 Some Remarks on
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Turkey will be USD 37 billion highe
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Caspian Report - Issue: 07 - Spring 2014

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