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TAP and the government of Montenegro sign MOUC on energy cooperation

20 May 2011

TAP and the Ministry of Economy of Montenegro have entered into a Memorandum of Understanding and Cooperation (MOUC) to explore opportunities for developing natural gas markets and enhancing supply diversity in South East Europe (SEE).

Trans Adriatic Pipeline continues to develop the framework that will enable increased security of supply and diversification of gas resources in the SEE region. This new MOUC is the third initiative that TAP has undertaken during the last months to make a positive contribution to these objectives. In February 2011 TAP and Croatian system operator Plinacro Ltd concluded an MOUC aimed at establishing cooperation in a number of areas and in April 2011 TAP and Bosnian gas system operator BH-Gas entered into a similar agreement.

The TAP consortium, comprised of European energy leaders Statoil, E.ON Ruhrgas and EGL, is aimed at constructing a natural gas pipeline via Greece, Albania and Italy to bring Caspian gas to Europe. The pipeline will be a key component in opening the European Union-designated Southern Gas Corridor. TAP is envisaged with reverse-flow capabilities that will also facilitate reliability in the event of regional energy supply disruptions.

Plinacro, together with BH-Gas and the Ministry of Economy of Montenegro, are promoting the Ionian Adriatic Pipeline (IAP), which intends to deliver gas to Croatia, Bosnia and Herzegovina, Montenegro and Albania. The IAP, which would connect to the TAP system at a tie-in point in Albania, will bring major energy security and economic benefits to the region.

Kjetil Tungland, Managing Director of the Trans Adriatic Pipeline project, said: “The signature of this MOUC is another significant step towards increased security of supply and diversification of gas resources in South Eastern Europe. TAP’s route and design features place it in an optimal position to ensure the realisation of these two strategic objectives. TAP will continue to work diligently with its partners in South Eastern Europe to bring gas supplies and promote economic development in the region.”

Vladan Dubljevi?, Deputy Minister of the Ministry of Economy of Montenegro said: ”The Government of Montenegro welcomes the signature of this MOUC as it lays the foundation for the future gasification of the country. Natural gas has applications in various fields and can be used to underpin the further development of our economy in line with today’s environmental requirements. Furthermore, our cooperation with TAP and IAP will enable Montenegro to diversify its portfolio of energy resources and to improve its security of supply. This is also of particular importance given that Montenegro has begun the comprehensive preparation for the publication of the first public tender for award of Concession Contract for Production of Hydrocarbons / Exploration Concession Contract in the offshore area of Montenegro. This MOUC will only increase the interest of potential companies, because it opens up additional possibilities for companies in case of the commercial discovery of gas in the offshore area of Montenegro”.

Media Enquiries

Lisa Givert, Head of Communications, mobile: +41 79 536 6016, lisa.givert@tap-ag.com

About the Trans Adriatic Pipeline (TAP)

The Trans Adriatic Pipeline (TAP) is a natural gas pipeline project. The 520km long 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 depending on throughput. The TAP project also envisages physical reverse flow of up to 8 bcm 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%).

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About Ionian Adriatic Pipeline (IAP)

The IAP project intends to connect the existing and the planned gas transmission system of the Republic of Croatia, via Montenegro, and Albania with the TAP system (Trans Adriatic Pipeline). The total gas pipeline length from Split (Croatia) to Fier (Albania) is 516 km. Its 5 bcm/y capacity will provide the natural gas supply for Albania, Montenegro, Bosnia and Herzegovina and Croatia. The implementation of the entire Ionian-Adriatic Pipeline project supports opening of the new energy corridor for the SEE region within the fourth EU transmission corridor, and in order to establish a new natural gas supply direction from the Middle East and the Caspian region. The Ionian-Adriatic Pipeline will be bi-directional, i.e. it will provide SEE region with natural gas also from other sources such as the future LNG Terminal on the island of Krk.