No binding bids were submitted for additional capacity in the 10 Bcm/year TAP pipeline that brings gas from Azerbaijan via Turkey to Europe, the operator said July 22.
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Bids were invited to be submitted from July 17-20 as part of the binding phase of TAP's capacity expansion market test.
"We confirm that the 2019 market test has ended and no binding bids have been submitted," TAP's commercial team told S&P Global Platts.
The result of the market test could be indicative of question marks over future European gas demand and the need for additional import capacity.
"We weren't assuming any expansion of TAP in our long-term forecast so this certainly supports that view," S&P Global Platts Analytics' managing analyst James Huckstepp said.
"Despite prompt prices holding up close to all-time highs the curve is extremely backwardated, which likely reflects pessimism around longer-term demand prospects," Huckstepp said.
TAP had said it was offering three expansion scenarios: a limited expansion to 14.4 Bcm/year, a partial expansion to 17.1 Bcm/year, and a full expansion to 20 Bcm/year.
According to the bidding documentation, the earliest the capacity expansion could have been realized was October 2026.
Platts Analytics said it had been skeptical on TAP's expansion for a while given declining gas-for-power demand, an already reduced dependence on Russian gas due to the current TAP capacity, as well as the expansion of the Passo Gries interconnection point on the border with Switzerland.
"It is also understood that Turkey's vision of increased domestic gas production is limiting its appetite for longer-term import commitments, reducing the need for further TANAP/TAP expansions," it said.
Despite the lack of binding bids, TAP said parties interested in more TAP capacity could now follow the 2021 market test process, which was launched on July 12.
Non-binding capacity and connection requests can be submitted up to Sept. 6, 2021, as part of the new market test, it said.
TAP -- which was the final piece of the much-heralded Southern Gas Corridor to allow gas from Azerbaijan to reach Europe -- began flowing gas from the border with Turkey into Greece and onward to Italy at the end of 2020.
Total gas flows into TAP at the Kipoi entry point on the border between Turkey and Greece reached 3.9 Bcm by July 21, according to TAP transparency data, an average of 19 million cu m/d.
Of the TAP flows so far in 2021, some 3 Bcm had reached Italy, or around 77% of the total.
Italian buyers are contracted to buy 8 Bcm/year of gas via TAP from Azerbaijan, with Greece and Bulgaria contracted to take 1 Bcm/year each.
In the first quarter of 2021, flows into Italy averaged around 10 million cu m/d, but since mid-April have doubled to an average of 20 million cu m/d, according to data from S&P Global Platts Analytics.
The increase in flows coincided with the expiry of a legacy gas supply contract between Azerbaijan and Turkey for 6.6 Bcm/year.
Flows were halted when the contract expired on April 16, suggesting Azeri flows into TAP were diverted from those previously destined for the Turkish market, allowing for TAP's fairly swift ramp-up to capacity.
At times during the past few months, total TAP flows on the Turkey-Greece border have hit capacity of some 28 million cu m/d.
Flows into TAP were, however, cut to zero for five days on May 17-21 due to an unplanned outage on the TANAP pipeline in Turkey, which feeds gas from Azerbaijan into TAP.
TAP's shareholders are BP (20%), Azerbaijan's Socar (20%), Italy's Snam (20%), Belgium's Fluxys (19%), Spain's Enagas (16%), and trader Axpo (5%).