The Trans Adriatic Pipeline (TAP) has reached an agreement with members of the Shah Deniz Consortium to secure funding for the TAP pipeline project.
The pipeline will transport natural gas from the giant Shah Deniz II development in Azerbaijan, shipping it via Greece and Albania, across the Adriatic Sea to southern Italy, and into Western Europe.
TAP managing director Kjetil Tungland said the signing of the new agreement follows the cooperation agreement signed between TAP and Shah Deniz in June.
"Our cooperation with Shah Deniz is now even closer and more far-reaching than before. This agreement will strengthen our continued working relationship in the run-up to the final routing decision. We remain confident of a positive outcome," said Tungland.
TAP existing shareholders EGL, Statoil and E.ON Ruhrgas were also involved in the agreement, which includes an option for the Shah Deniz shareholders to take up to 50% equity in TAP.
Funding secured will be employed for various work in several important areas during the period.
The agreement has been welcomed by EGL, Statoil and E.ON Ruhrgas, which will work together to deliver the project, whose final routing decision is expected in 2013.
TAP pipeline will have the option to expand the transportation capacity from 10 billion cubic metres to 20billion cubic metres per year, depending on supply and demand.
The proposed pipeline will open up the so-called Southern Gas Corridor, which will enhance Europe's energy security.
TAP's shareholders in the project are EGL of Switzerland (42.5%), Norway's Statoil (42.5%) and E.ON Ruhrgas of Germany (15%).