TrendCapital, StatoilHydro, and Swiss utility EGL have signed an agreement setting up a 50-50 joint venture to develop, build, and operate the planned 520-km Trans-Adriatic pipeline (TAP), intended to provide a route for Caspian gas to Europe. Up until now, a 100% EGL-owned project, the 520km-long TAP aims to transport gas via Greece and Albania to SE Italy, and includes a 115-km subsea section from Albania to Italy.
EGL said the line would cost an estimated $2.2 billion, and is subject to a final investment decision in the second half of 2009. Its planned initial capacity is 10bn cum/yr from 2011 at the earliest, with the option to expand to 20bn cum/yr.
StatoilHydro's significance in the project is as the owner of a 25.5% stake in the Shah Deniz field in Azerbaijan; the company is also the commercial operator of the South Caucasus pipeline which transports Shah Deniz gas to Turkey via Georgia. The parties involved in the Shah Deniz production-sharing agreement (PSA), which was signed in June, 1996 are: BP (operator – 25.5%), StatoilHydro (25.5%), the State Oil Co of Azerbaijan Republic (SOCAR – 10%), Lukoil (10%), NICO (10%), Total (10%), and TPAO (9%). Gas production from Shah Deniz commenced in December, 2006.