Coinciding with the Trans Adriatic Pipeline (TAP) awarding of contracts last week for the engineering, procurement and construction (EPC) of approximately 760 km of cross-country onshore pipeline in Greece and Albania, the European Commission ruled that the Host Government Agreement between Greece and TAP conformed with EU state aid rules, opening the way for the new gas pipeline to enter Europe.

In particular, the agreement provides TAP with a specific tax regime for 25 years from the start of commercial operations. This may give the company an economic advantage over its competitors, who would not benefit from the specific tax regime, and therefore involves state aid in the meaning of the EU rules.

Maroš Šefčovič, Vice-President responsible for Energy Union, said: "Today's approval of the TAP agreement is an important step towards completing the Southern Gas Corridor. The Energy Union framework strategy of February 2015 identified this project as a key contribution to the EU's energy security, bringing new routes and sources of gas to Europe. Just on Monday, the Southern Gas Corridor ministerial meeting in Baku, which I attended, confirmed the determination of all participating countries and consortia to complete this key infrastructure project in time."

The EU ruling is a key factor in enabling further work on the TAP pipeline to proceed. Thus, one of the EPC contracts was awarded to a joint venture comprised of Bonatti S.p.A (Italy) and J&P AVAX S.A (Greece) for two lots in northern Greece. The sections cover approximately 360 km of pipeline, stretching between Kavala and Ieropigi (Albanian border). The other to SPIECAPAG (France) for a 185 km lot in Greece, between Kipoi and Kavala, as well as two lots in Albania (215 km in total), stretching from Bilisht to Topoje. SPIECAPAG will also carry out the pipeline river crossing at the Greek-Turkish border, where TAP will be connecting to the Trans Anatolian Pipeline (TANAP).