Greek PM Hails TAP Gas Pipeline Award

Greek Prime Minister Antonis Samaras Friday hailed a decision to build a pipeline that will bring natural gas from Azerbaijan to Europe via Greece, saying the investment will create thousands of new jobs, put the country on the regional energy

The Trans Adriatic Pipeline (TAP) project aims to transport gas from the Caspian region via Greece and Albania and across the Adriatic Sea to southern Italy and further into Western Europe. The project will open a new so-called Southern Gas Corridor to Europe and establish a new market outlet for natural gas from the Caspian.

The consortium building the pipeline—whose main owners are BP BP.LN -0.51% PLC, Azerbaijan’s state energy company SOCAR, and its Norwegian counterpart Statoil STL.OS -0.32% ASA—chose TAP over the rival Nabucco West project, Gordon Birrell, BP’s regional president for Azerbaijan, Georgia and Turkey said Friday.

“This is the first and important step in opening up the Southern Gas Corridor and, as we look ahead, it will have a major role to play in Europe’s energy security and ensuring the diversification of gas supplies to Western and South European markets,” said TAP Managing Director Kjetil Tungland.

Almost two thirds of the pipeline—which has a total length of 870 kilometers—passes through Greece and is expected to bring some €1.5 billion ($1.96 billion) to the country. It will create 2,000 new jobs immediately relating to the construction of the project and another 10,000 indirect jobs. It is also expected to provide a boost to northern Greece, which has a mounting unemployment issue.

“After the announcement of the TAP project, the catastrophic scenarios for Greece and its exit from the euro are put to rest,” Mr. Samaras said in a statement released from Brussels, where he was attending a European Union summit. “Who would invest that amount of money in a country that is economically, socially and politically dangerous?”

This has been a difficult month for Greece. Recently, the country failed to attract a single bid for the privatization of its natural-gas company Depa, putting a major dent in Greece’s anticipated privatization proceeds. A mini-political crisis then followed, after a dispute over the sudden shutdown of the country’s state broadcaster, which led to the departure of junior partner Democratic Left from the country’s three-party coalition government.

The Depa deal in particular opened up a potential €1 billion hole in Greece’s privatization revenue target for the current year, while the sale of the country’s gambling monopoly OPAP OPAP.AT -0.76% threatens to collapse because of disputes between the private consortium that won the bidding and the company’s management.

“The project puts Greece back on the global energy map,” said Konstantinos Filis, research director of the Institute of International Relations at Panteion University in Athens. “It changes the picture of the country, which seemed to be in systemic danger—especially after the Depa failure.”

The TAP deal is “the most significant positive economic development regarding our country in the past 10 years,” Mr. Samaras said.

The Greek premier, who has made energy a key pillar in Greece’s recovery effort, hopes that the project will boost the country’s recession-ravished economy. In early May, he traveled to Azerbaijan in a bid to help clinch the deal, along with other potential bilateral projects.

Mr. Filis said this “could be the beginning of a positive news flow for the country”, but more needs to be done in order for that to happen.

“TAP is very important for the country, but it is only an indirect investment. Greece will move away from the vicious circle only if it implements reforms and adopts a flexible investment plan in order to make it attractive to foreign investments,” he said.

Πηγή: Wall Street Journal