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Tesla gas pipeline project may be included into European Commission’s PCIs

A joint gas pipeline initiative backed by Serbia, Macedonia, Hungary, Turkey and Greece has been submitted for possible inclusion in EU's list of Projects of Common Interest (PCI), a pre-condition for the proposed undertaking to become eligible for funding from EU resources, Hungarian natural gas transmission system operator (TSO) FGSZ said on Friday.

In June, Hungary's foreign affairs and trade ministry said the backers of the project held a working group meeting to mark the formal start of expert-level work on the Tesla project that aims to examine the feasibility of creating a gas pipeline connection between Turkey and Central and Southeast Europe, to clarify technical, financial, regulatory and legal questions, and to prepare the pre-feasibility study of the project.

The ministry also said at the time Tesla - which will comply with the EU’s Third Energy Package, aims to connect the Central and Southeast European consumption hub with the diversified Turkish market and that as a pipeline with bidirectional flow capability will significantly contribute to the energy security of the Central and Southeast European region as well as to that of Europe as a whole.

The Hungarian authorities noted that the participating states are ready “to welcome in cooperative spirit other willing countries of the region to participate in these efforts”.

"FGSZ and other TSOs alongside the suggested route have submitted the respective part of Tesla for PCI status," a spokesperson for the Hungarian company told SeeNews in an email.

"The conceptual scheme of the corridor has been completed. Furthermore the relevant involved transmission operators – including FGSZ – have submitted their portion of the concept to the European-level Ten-Year Network Investment Plan, ENTSOG TYNDP, in order to achieve that their project gets into the final PCI list," FGSZ said.

The Hungarian company said the task force agreed between all the relevant TSOs - which will provide support for the preparation and execution of the project - is expected to hold its first meeting this autumn.

In June, the Hungarian foreign affairs and trade ministry said the Tesla pipeline was tentatively scheduled for a commercial launch in 2019 and that a Memorandum of Understanding between the participating TSOs should be ready for signature at a ministerial meeting this fall.

The ministry also said the integration of regional gas markets and the development of a network of bidirectional interconnectors are important for Hungary.

"Nevertheless, we are still convinced that a large capacity pipeline is necessary for the supply of the region. Beside its supply security relevance, we believe that Tesla, an infrastructure project across the territories of a number of countries, has significant added value in terms of the stabilization and economic development of the wider region, as well as concerning the integration process of the Western Balkans," the ministry added.

The European Commission is currently in the process of updating its list of PCIs in the field of energy infrastructure. The second iteration of the list - which is updated every two years, will be presented by the Commission by the end of this year, Commission spokesperson Nicole Bockstaller told SeeNews in an email.

The identification of PCIs is based on a regional approach and is carried out by Regional Groups consisting of representatives of competent ministries, national regulatory authorities and the gas and electricity transmission system operators and project promoters, the European Network of Transmission System Operators (ENTSO) for electricity and gas, the Agency for the Cooperation of Energy Regulators and the European Commission, Bockstaller said.

Project promoters submit the electricity, gas and oil project proposals for which they want to obtain the status of PCI to the Regional Groups for assessment. The assessment will be carried out in the coming months and the Regional Groups will decide on the Regional PCI lists in the fourth quarter of 2015.

According to data from ENTSOG TYNDP, Tesla's promoters - alongside FGSZ, are Macedonia's GA-MA, Serbian state-owned gas monopoly Srbijagas and Greece's DESFA. The final investment decision for the project is seen early next year with permitting scheduled for early 2017. As expected gas sources, the document lists the Caspian region and Russia.

In addition to Tesla, Eastring is another initiative for a bidirectional gas pipeline project - also submitted for PCI consideration, that could connect countries in Central and Eastern Europe to the gas from liquefied natural gas terminals in Greece and Turkey. Eastring is being promoted by Slovakian gas pipeline operator Eustream alongside potential partners from Bulgaria, Hungary and Romania.

ENTSOG, or the European Network of Transmission System Operators for Gas, facilitates and enhances cooperation between gas TSOs across Europe in order to ensure the development of a pan-European transmission system in line with European Union energy goals.

Aside from domestic natural gas transmission, FGSZ also performs transit activities for Serbia, Bosnia and Herzegovina, as well as cross-border deliveries towards Romania, Croatia and Ukraine.

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