Natural gas pipeline through Adriatic achieves major milestone

Dietikon,  Tuesday, March 13, 2007

EGL's planned Trans Adriatic Pipeline (TAP), which will connect Greece with Italy via Albania - through the Adriatic Sea - has reached an important milestone. The underlying planning work for the natural gas pipeline project has now been completed. Construction is due to commence in 2008, and TAP is scheduled to become operational in 2010. The new pipeline will provide western European countries better access to the significant natural gas reserves in the Caspian region, Russia and the Middle East. The TAP project is supported by the European Union. Negotiations with project partners are progressing well.

EGL has been systematically and successfully developing its natural gas operations as a third strategic pillar of its activities since 2003. Long-term reliable supplies and transportation are closely related in this sector. Successful natural gas trading thus also calls for the requisite transport capacities.

Extended basic engineering work completed successfully

The Trans Adriatic Pipeline (TAP) is a cornerstone in the systematic implementation of EGL's gas strategy. Projections and planning for the TAP are now at an advanced stage. Extended basic engineering work began soon after the feasibility study was conducted in 2005. This preparatory work, assessing both the technical and the environmental aspects, was successfully completed in March 2007.

The engineers have defined the technical design of the pipeline and the equipment to be used in the project. Alongside this work, environmental and related data was collected. The landfall locations on the respective coasts were also determined, as was the best route through the Adriatic. Another important step was the investigation of the technical and geological risks to be avoided.

A specially-equipped survey ship assessed the Adriatic marine section between Albania and Italy. Divers documented the flora and fauna in the coastal areas off the Italian port of Brindisi. A special aircraft was employed to photograph the geographical conditions on land, particularly in the mountainous areas near the coasts.

The environmental impact assessment has been concluded and submitted for consultation and approval.

The pipeline will be built together with strong partners. Negotiations for this are currently underway, and EGL expects to announce its first partnerships by the middle of the year.

Construction is scheduled to begin in 2008. The current aim is for the pipeline to go on stream in 2010.

New pipeline is logical element in the chain

The planned Trans Adriatic Pipeline is a logical element in the value chain, connecting Italy with existing and planned natural gas transport grids in South-East Europe. The pipeline will therefore give the whole of Western Europe better access to the major natural gas reserves located in the Caspian region, Russia and the Middle East. It will also play an important part in securing natural gas supplies to Italy, where a tight supply situation has emerged.

The TAP's path from Greece through Albania will supply South-East Europe with the natural gas they urgently need, thereby making a considerable contribution towards the region's economic development and political stability.

Although EGL wants to use the TAP to transport its own natural gas, the pipeline will also be available to third parties interested in long-term transport capacity.

Consistent with EU energy policy

The new Trans Adriatic Pipeline is the most economically viable project to link European gas markets with the vast gas reserves in the Caspian region and the Middle East. It opens up a fourth natural gas import corridor for natural gas to Europe alongside sources in the North Sea, Russia and North Africa.

The TAP is supported by the European Union and recognised as a Priority Project by the Trans-European Energy Network (TEN-E).

Natural gas business represents important pillar for EGL

EGL is working with partners on the construction of four combined cycle gas-fired power plants in Italy, three of which are already under way while the fourth is in the advanced project phase. The plants, which have a total installed capacity of more than 3,000 MW, of which around 2,000 MW are for EGL's own power production, are scheduled to come on stream between 2007 and 2009. As a result, the security of power supplies to Italy will increase substantially.

Long-term supply agreements with natural gas producers

EGL began building up its own natural gas business in early 2003. Since then, EGL has suc-cessfully set up its new gas division. In order to meet future demand, EGL has already con-cluded long-term supply agreements with natural gas producers. Thanks to a diversified pro-curement portfolio, EGL has enough natural gas to both supply its own power plants in Italy and continue to develop its natural gas trading operations in north-western Europe, Italy and Romania.

EGL anticipates concluding further long-term supply agreements with other natural gas produc-ers in the near future.

For further information on the Trans Adriatic Pipeline (TAP)

Further Information

Lilly Frei, Leiterin Corporate Communications
Tel. +41 44 749 40 10

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