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Albania Italy cable potentially more profitable than Montenegrin project

March 23, 2015 | Comments: 0

Albania is trying to position itself as the export route for cheap Balkan hydro power into Italy, ahead of Montenegro, ICIS reported. An undersea electricity interconnector between the two countries could be more feasible than a cable linking Montenegro and Italy, according to Lorenc Gordani, an energy expert from Albania.

The Albanian government signed a memorandum of understanding with German engineering company Max Streicher GmbH & Co. in late February to establish a consortium. The next step would be a feasibility study, ICIS said. Building a 400 kV line between Italy and Albania is on the list of projects of Energy Community interest. Energy Minister Damian Gjiknuri and Deputy Minister Dorian Duck signed the agreement for Albania, and Franz Josef Pschierer, the minister of energy of Bavaria, encouraged the deal, Law360.com said, citing a press release by the Albanian Ministry of Economy, Trade and Energy.

The laying of the infrastructure for the Trans Adriatic Pipeline (TAP) could cut the cost of building an electricity link between Albania and Italy, making it financially more viable, according to Gordani, legal energy market advisor and project manager at the Albanian Centre for Energy Regulation and Conservation (ACERC). The initial estimated cost of the Albanian‒Italian link is around EUR 200 million, according to the Albanian energy ministry.

Meanwhile, the first, 140 kilometer phase of installing the Tivat (MNE) ‒ Pescara (ITA) underwater line, which shall be 390 kilometers long, was completed in mid-March. Italian transmission system operator (TSO) Terna had estimated a project cost of EUR 760 million for the cable to Montenegro, ICIS said. The Montenegrin media estimates the project, financed by the European Investment bank, to be worth around EUR 800 million.

Gordani also questioned the prolonged deadlines for the Montenegro cable. He suggested that the Albanian link could even launch first but it would need to attract private investment.