EnVal: U.S.-EU trade talks, regional affairs and… … the future is now: Artificial Intelligence

In this EnVal, we briefly evaluate the foundations for an LNG trade agreement between the U.S. and the EU as meetings take place  today (Sept. 10), in Brussels.
We have also written two short progress reports on TAP and the Ukraine-EU relations. As the EU scraps anti-dumping tariffs on Chinese solar panels, we look at the potential for this measure to help increase the European sector’s competitiveness.
Last but not least, we briefly analyze the implications of Artificial Intelligence (AI) developments for the energy sector.

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Trans Adriatic Pipeline (TAP) – progress report and Italian impasse

With TANAP inaugurated in June, all eyes are now on the progress of the TAP pipeline, which will bring Caspian Gas from the Greek-Turkish border to SEE Europe and onwards to Western Europe, coming ashore in Southern Italy. On the 31st of August, Albanian media reported that construction of the Albanian section of the TAP has been completed 99% (213km out of 215km). The latest information available on the project’s website (end of July 2018), puts the completion ration at ‘more than 75%’.

Regardless of whether the Albanian section TAP will be completed this fall or not, it is certain the pipeline will not have a connection at either end until next year. The connection with Greece will be completed first, allowing Azeri gas to flow all the way to Albania. Work in Greece is progressing well, TAP country manager for Greece, Katerina Papalexandri, announcing in June that almost the entire route of the pipeline in Greece (540 km out of 550 km) has been cleared, with over 500km of pipeline having been laid and welded.

Looking towards the Italian shores and the western end of the pipeline, its construction remains clouded in political turmoil. As we reported in on one of our previous EnVal’s, Italy’s Environment Minister Sergio Costa declared in June that the TAP pipeline arriving in Italy is “pointless”, while Deputy Prime-Minister Matteo Salvini recently stated support for the project, as “the benefits outweigh the environmental costs” – thus sparking a political row within the ruling coalition.

With the Italian end of pipeline due to be completed in early 2020, it was reported that in the first days of September, former British prime minister Tony Blair – a consultant on TAP since 2014 – held talks in Rome with Deputy PM Salvini. Details are scarce about this meeting, but it is likely that efforts were channeled to overcome the political dispute that could threaten the (timely) construction of the pipeline.

The TANAP-TAP project incorporates significant Italian business interest. The Italian natural gas TSO (transport and system operator) SNAM holds 20% of the TAP project company, is part of the consortium biding for acquiring DESFA (the Greek TSO) and is supporting AlbGaz (the newly established Albanian TSO) to develop its operation.
But Italy is not offered only Azeri gas. A Gazprom backed project (Poseidon pipeline) plans to connect Greece directly with Italy and deliver Russian gas to western markets.

The moment of truth is approaching and sooner rather than later Italy will have to choose between siding with those who want to walk away from the Russian dominance in the natural gas sector or giving in to internal political pressure from politicians who regard Moscow as a pillar for support for their anti-EU crusade.

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