BRUSSELS (Reuters) - European Union regulators approved a deal on Thursday between Greece and the Trans-Adriatic Pipeline (TAP) that will bring gas from Azerbaijan to Europe, saying the project was in line with the bloc's state aid rules.
The 870-km (540-mile) pipeline, part of the so-called southern corridor that will link Azerbaijan's giant Shah Deniz II field with Italy, crossing through Georgia, Turkey, Greece, Albania and the Adriatic Sea, is the largest project to bring new supplies to European consumers.
"The Trans-Adriatic Pipeline will bring new gas to the EU and increase the security of energy supply for Southeast Europe," European Competition Commissioner Margrethe Vestager said in a statement.
"The investment incentives offered by the Greek government are limited to what is necessary to make the project happen and in compliance with state aid rules."
As part of the Greek deal, TAP will be granted a specific tax regime for 25 years.
TAP is owned by BP (L:BP), Azeri state energy firm SOCAR, Snam (MI:SRG), Belgian company Fluxys (BR:FLUX), Spain's Enagas (MC:ENAG) and Axpo [AXPOH.UL].
The exploration of Shah Deniz II and the financing of the gas corridor projects were proceeding in line with plans, SOCAR said in a statement issued by its German office on Thursday.
Around 10 billion cubic metres (bcm) per year of Azeri gas should reach Europe by 2020 at the latest through TAP as well as the South Caucasus Pipeline through Georgia and the Trans-Anatolian Pipeline (TANAP) through Turkey, it said.
Total project costs - which include drillings, offshore platforms and terminals as well as pipelines - are $45 billion and the entire pipeline route will span 3,500 km, with the $5-billion TAP the final link into Europe.