Contract “Study on economic benefits of TAP in Albania”, Trans Adriatic Pipeline AG Albania

  • Category      :    Energy sector, Market study
  • Date              :    January - June 2018

Purpose of the project

  • The quantification of economic direct, indirect and induced impacts;
  • The monetization of the employment effects;
  • Give quantitative evidence about the macroeconomic effects associated with the development of this large natural gas project in Albania, which is a country with relative limited production basis;
  • The forecasting of impacts of production in the following 50 years, based on multiplicators of the model used.

Short Description

Trans Adriatic Pipeline (TAP) has a key role to play in securing the long-term diversity and security of Europe’s gas supply. It consists of an 878-km long gas pipeline via Greece and Albania and across the Adriatic Sea to Italy’s southern Puglia region.

This pipeline will connect Western and South-Eastern Europe to the abundant new gas sources in the Caspian basin and beyond. TAP will create new opportunities in the Southern Gas Corridor and across Europe, and will be vital in meeting the region’s ever-growing energy demands in a cost-effective and sustainable way. The TAP pipeline provides the missing link between the country systems of Turkey and Italy. The project is designed to expand its initial transportation capacity from 10 to 20 billion cubic meters(bcm) per year depending on throughput.
TAP passes in Albania from East to West, about 215 km long, starting at BilishtQender, in the Korca District, bordered by Greece, continuing in the district of Berat and beyond in Fieri District. The entire project affects 38 administrative units (former communes), extending also to the Northern project in the Durres Municipality for gas deposits. The TAP exit in Albania will be 17 km northwest of Fier, up to 400 m inland within the coastline. The share in Albanian territorial waters will be about 37 km long. Project impacts extend to a wider area than the trace itself. Administrative Units are an important aspect of measurement of economic impacts.
Prior to construction, TAP has undertaken an assessment of the economic benefits of TAP’s activities. But in order to provide a better assessment of its impacts, TAP signed the agreement with InSET, after an open bid process, to redo this assessment in the light of the actual construction activities underway and improved understanding of operations.

Completed activites

  • Scoping phase
    • Organizational meeting
    • Technical meeting
  • Meeting with Chamber of Commerce, Local Administrators of Labour offices, municipality, professional commercial high schools in Vlora and Saranda.
  • Production of a long term macroeconomic framework for the Albania economy, the baseline scenario that does not take in consideration the construction of TAP, showing the main macroeconomic indicators, and private sector development
  • Develop the same framework, including TAP, or TAP framework, to see the main impact of TAP to the long term macroeconomic situations as the difference between the baseline and TAP framework.
  • Develop and implement different methodologies and forecasting tools, but mostly based on an Input-Output macroeconomic model (functional and behavioural relationship between different economic variables).
  • Estimate in detail the benefits that link with local development that TAP affects directly. applying different approaches—micro-simulation exercises—on estimating different impacts
  • Deliver timely the inception report, draft report and final report, according to contract.

Project future

The study will also provide 4-6 case studies (from a range of social and geographic themes, such as road construction and improvement, different renovations in schools or other infrastructures for the communities, projects protecting the nature and environment, show the benefits and to illustrate the broader data to support external engagement.
Further studies may be proposed based on the methodology for energy sector and/other sectors and foreign investments in the future.

Institute for Sustainable Development, Environment and Tourism