The Trans Adriatic Pipeline (TAP) and the government of Albania signed in Tirana a Memorandum of Understanding and Cooperation (MOUC) with a focus on exploring possibilities for connecting the Ionian Adriatic Pipeline (IAP), a major regional natural gas project, to the Trans Adriatic Pipeline system at a tie-in point near Fier in Albania, TAP reported.

The TAP consortium and the Ministry of Economy, Trade and Energy of Albania (METE) agreed to cooperate on the development of South Eastern Europe (SEE) natural gas markets and the strengthening of security of supply and diversification of gas resources in the region.

Under the terms of the MOUC, a joint working group will be established immediately to further evaluate areas of potential cooperation, ranging from the alignment of overall schedules and sharing of best practice, to facilitating the mutual understanding of each project's technical require-ments.

Earlier this year TAP signed similar agreements with other IAP participants, including Croatian gas system operator Plinacro Ltd, Bosnian gas system operator BH-Gas and the government of Montenegro. TAP supports the objectives of these countries in further developing the SEE regional gas market and integrating it to the EU energy market.

By having signed agreements with all four participants of the Ionian Adriatic Pipeline, TAP consolidates the framework necessary for the further development of the TAP and IAP's interconnection. Next steps will include alignment of the projects' schedules and technical specifications of the pipelines.

The IAP connection to TAP will provide SEE, a region heavily dependent on a single gas supplier, with new and reliable natural gas supplies from the Caspian region. What is more, it will bring major energy security and economic benefits to the region. Recently, the significance of the IAP project was recognized by the Western Balkan Investment Framework (WBIF), which decided to grant the Ionian Adriatic Pipeline project 3.5 million Euro for the execution of a feasibility study and environmental impact assessment (EIA).

The Trans Adriatic Pipeline (TAP) is a natural gas pipeline project. The pipeline will 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 is aimed at enhancing security of supply as well as diversification of gas supplies for the European markets. TAP will open a new so-called Southern Gas Corridor to Europe and establish a new market outlet for natural gas from the Caspian Sea.

The project is designed to expand transportation capacity from 10 to 20 bcm per year. TAP also envisages physical reverse flow of up to 80 percent and the option to develop natural gas storage facilities in Albania to further ensure security of supply during any operational interruption of gas deliveries.

TAP's shareholders are EGL of Switzerland (42.5%), Norway's Statoil (42.5%) and E.ON Ruhrgas of Germany (15%).

Gas from the Azerbaijani Shah Deniz-2 project is regarded as the main source for the TAP project. The Shah Deniz field's overall reserves are estimated at 1.2 trillion cubic meters of gas.

The Shah Deniz consortium expects to receive from various pipeline projects, including the TAP, specific proposals by Oct.1, 2011. The gas transportation route will be selected by late 2011.

Copyright (c) 2011, Trend News Agency, Baku, Azerbaijan. Distributed by McClatchy-Tribune Information Services.