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Is the Ionian Adriatic Pipeline project regaining prominence?

Is the Ionian Adriatic Pipeline project regaining prominence?

The Government of Croatia recently adopted a Strategic Partnership Declaration between Croatia and Albania, which was accompanied by an Action Plan, aimed at deepening bilateral relations and pinpointing some key areas of cooperation. Apart from assisting Albania on its European integration journey, the two countries agreed to push for a swift realization of a project that has been on the regional to do list for over a decade – the Adriatic-Ionian Pipeline (IAP).

Although the story of the IAP project begun a decade ago, it regained prominence after Croatian President Kolinda Grabar-Kitarovic mentioned it at the Three Seas Initiative summit held in Bucharest in late 2018. For the realization of this project, Albania, Montenegro and Croatia need not only to cooperate closely, but also invest 600 million euros.

The weight of this project lies in the bigger picture – the South Gulf Corridor. This corridor plans to bring gas from the Caspian Basin (Azerbaijan) to the European Union in order to reduce dependence on Russia. The plan is to link the Adriatic-Ionian Gas Pipeline (IAP) to existing Croatian gas systems, via Montenegro and Albania with the Trans Adriatic Pipeline (TAP). Linking Trans-Adriatic (TAP), Trans-Anatolian (TANAP) and South-Caucasus pipeline (SCP) to Europe would enable reliance of a brand-new source in Caspian Region and Middle East.

This project is of strategic importance to the European Union and, apart from the economic ones, there are political motives for empowering Europe’s energy security and reducing the influence of Russia in the countries of Eastern Europe. In February 2018, the Fourth Ministerial meeting of the South Corridor Advisory Council was held, when a letter of intent on establishing a project company of the Ionian-Adriatic Pipeline was signed.

The IAP would enable Croatia to diversify its supply, open the possibility of gas transit through Croatia to other countries, and significantly contribute to its energy independence. Another new possibility would be connecting the planned Krk LNG terminal to IAP and therefore enable a direct connection of the North and East pipeline through Croatia. With the realization of this project Croatia would upgrade its gas system, increase the usability of the existing system and, by integrating into European gas flows and the gas market, ultimately provide a more competitive price for natural gas.

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