Managing Director: TAP made good progress towards commercial, operational readiness in 2018

Trend’s end of the year interview with TAP’s Managing Director, Luca Schieppati

Question: How would you sum up the results of 2018 in the implementation of the TAP project?

Answer: Looking back at the last 12 months, 2018 has been a good year for TAP.

The Trans Adriatic Pipeline continues to progress on budget and on schedule. In terms of overall progress, we are more than 82% complete – including all engineering, procurement and construction scope (as of the end of November 2018).

This year was marked by a number of milestones. This included the successful installation of the turbo compressors in Greece and Albania, launching offshore construction works, completing the connection (otherwise known as the “golden weld”) with TANAP, completing one of the longest horizontal directional drilling to cross the Axios river in Greece and successfully installing the pipeline at the highest point of the project, 2,100 meters above sea level in the Albanian mountains.

Despite undertaking such technically challenging work, our safety performance remains world-class. So far, we have worked more than 37 million man-hours and driven over 100 million kilometres without any major accidents and with frequency rates (Lost Time Frequency rate and Total Recordable Frequency Rate) in line with best industry levels. TAP also received the OHSAS 18001, ISO 14001 and ISO 9001 certifications. These were awarded for our integrated quality, health, safety and environment (QHSE) management systems, reinforcing that TAP applies industry best practice, processes and procedures.

I would also like to recognise the successful implementation of our social and environmental investment (SEI) projects across our host countries. To recall just a few examples, in Greece, we donated over 50 utility vehicles to local authorities. These included ambulances, snow ploughs and garbage trucks. We also refurbished the Komotini paediatric clinic and set up the first human milk bank in Northern Greece. In Albania, we renovated several schools, rehabilitated the Mbrostar water supply system in the Municipality of Fier and ran the third edition of our internship programme. In Italy, we launched a master course in hospitality management (Ho.Ma.), supported the Real Galatone football team and ran the second edition of our Master of Excellence in new food (MENA). These projects are aimed at improving the quality of life of thousands of people and we’ll continue implementing such initiatives in 2019.

Last but not least, we have also made good progress towards commercial and operational readiness.

Q.: What percent of work has been completed on TAP?

A.: As I stated earlier, we are more than 82 percent complete.

Specifically, in Greece, as of early-December, we completed right of way clearance and stringing (approximately 550 km in total). Also, over 547 km have been welded, 535 km back-filled and approximately 492 km are being reinstated.

In Albania, right of way clearance and stringing (approximately 215 km in total) have been completed, 214 km have been welded and approximately 177 km are being reinstated.

This means that between Greece and Albania, around 97 percent pipes are already in the ground (back-filled).

In Italy, TAP has resumed works for the completion of the Italian section of the pipeline. At the moment, works are under way at our pipeline receiving terminal, the micro-tunnel site and the exit point at sea.

In line with the Single Authorisation permit granted by the Ministry of Economy in May 2015, TAP continues to progress its secondary permitting activities. TAP has now secured the majority of its Verifications of Compliance.

Q.: What is the status of compressor stations as part of TAP?

A.: The construction of the compressor stations in Greece and Albania is proceeding well. Overall progress at Fier in Albania is nearly 74 percent complete and at Kipoi in Greece, is 79 percent complete. Works are well advanced on buildings, mechanical and piping, with the electrical and instrumentation scope under way at both stations.

The piping fabrication at Kipoi is complete and over 90 percent of the piping is installed, with hydro strength testing progressing on schedule. The three compressor units are installed, and final alignment is complete, with mechanical and electrical hook up in progress.

In Fier the piping fabrication is also complete with piping installation more than 80 percent finalised and hydro strength testing under way. With the three compressor units installed in June 2018, final alignment is ongoing.

At both stations our teams are working towards mechanical completion in the second quarter of 2019, with overall completion scheduled for the third quarter of 2019.

Finally, our metering station at Bilisht, Albania (near the Greek border) is 72 percent complete.

Q.: At what stage is the construction of TAP's offshore section?

A.: TAP marked the launch of offshore works mid-October 2018. Overall, offshore construction work is approximately 10% complete, as of end-November 2018.

At our Albanian landfall site, work is under way for building the temporary cofferdam and causeway. Once construction is complete, the pipeline will be buried underground, so it will be invisible.

In Italy, preparations for the construction of the micro-tunnel are well under way.

Offshore pipeline installation will start in 2019 and works are due to be completed on time for TAP to transport Caspian gas to Europe in 2020.

Q.: Do you have the approximate time of holding the next open season?

A.: The capacity of TAP can be expanded up to 20 bcm/a through the addition of compressor units in the existing two compressor stations and the construction of two additional pre-planned compressor stations.

Investment in expansion is reliant on new long-term capacity bookings made through market tests and can be done stepwise to match demand. TAP intends to launch the next market test mid-2019, in parallel with the operators of the adjacent transportation systems, according to a European-wide calendar. Further market tests are expected to take place every second year.

Q.: What will be the priorities of your work on TAP in 2019?

A.: Next year will be key in ensuring the pipeline is commissioned and progressively ready for operations and the start of gas deliveries in 2020.

On the technical side, we will be focused on safely completing onshore pipeline construction works in Greece and Albania. Once mechanical completion is achieved, TAP will enter several phases to ensure the pipeline is entirely safe and ready for operations, in line with national and international safety and operations standards. These phases include pre-commissioning and commissioning. Additionally, 2019 will be marked by the completion of our compressor and metering stations in Greece and Albania as well as significantly progressing the offshore construction activities, onshore pipeline construction and the pipeline receiving terminal in Italy. Finally, early 2019 we also expect to fully complete construction of the first section of the pipeline in Greece.

In parallel, we are very focused on preparations for commercial operations as a transmission system operator (TSO) and an Independent Transmission Operator (ITO). In 2019, the main deliverables of our commercial team will be finalising and adopting the TAP Network Code and implementing the related Information and Communications Technology (ICT) tools, signing the Interconnection agreements with the adjacent TSOs as well as securing a series of commercial licences to operate from the relevant authorities in our host countries, such as the Independent Natural Gas System operations licence in Greece and the transmission licence in Albania.

Our operations team is committed to safety, environment and efficiency, with a strong focus on availability and reliability. Therefore, a full Operations Readiness Programme has been established, which includes independent Operability Assurance by third parties. Our operations team is also building both the transportation services (e.g. dispatching, metering, balancing) and the asset management processes in order to be ready to operate efficiently and effectively. Maintenance plans have already been defined and shared with the local transmission system operators in Greece and Italy, and the maintenance joint venture for Albania.

All in all, there is still a lot of work ahead of us. But we are confident that TAP will continue to progress on time and on schedule, delivering a modern, safe and robust pipeline for the transport of Shah Deniz gas to Europe.