Contribution of Tap to the Italian Economy

Abstract

The decision of building the Trans Adriatic Pipeline (TAP) represented a major breakthrough in the development of the European natural gas system. TAP is designed to transport the natural gas coming from the field of Shah Deniz, in the Caspian Sea, to the EU final markets. TAP’s main destination will be the Italian market, which will be the largest and most important gas market connected to the pipeline. Despite a protracted crisis, in 2013 Italy consumed approximately 70 billion cubic metres (Bcm), remaining the second gas market in continental Europe after Germany.

TAP's impact on the Italian economy is consistently positive. During the construction period, it will provide small but still tangible positive effects on the territory where the infrastructure will be built (80 million euros per year), which will partially continue after its commissioning (12 million euros per year). Once operating, it will increase competition among the operators on the final markets, in theory reducing wholesale and final prices.

In the case of development of export capacity on the Italian gas system, TAP will provide the necessary volumes to preserve a security buffer on the Italian gas network and therefore allow significant export flows without endangering the stability of the final offer on the Italian market.

TAP's positive impact on the Italian economy is increased by the fact that the investment is completely covered by private capitals or, at least, not by the Italian public spending. Therefore, the Italian economy is benefitting from more security, more competition and potential price reductions without resorting to the economic distortions caused by taxation.

ISPI: Analysis: Contribution of Tap to the Italian Economy [PDF] http://www.ispionline.it/sites/default/files/pubblicazioni/analysis_256__2014_0.pdf

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