Statoil dumps stake in European gas pipeline

MILAN, Italy, Dec. 1 (UPI) -- Italian energy company Snam said it bought Statoil's stake in the planned Trans Adriatic gas pipeline, billed as a near-panacea for European diversification.

For total consideration of $220 million, the Italian company took on the 20 percent stake in the planned gas pipeline from Norway's Statoil.

TAP is slated to transport natural gas from the second phase of the Shah Deniz natural gas field off the coast of Azerbaijan as early as 2019. It will run from the Turkish border with Greece to Italy and onto southern European markets, part of a network dubbed the Southern Corridor.

Carlo Malacarne, the chief executive officer at Snam, said the deal follows an agreement made in September with the State Oil Company of Azerbaijan Republic,

"TAP is crucial to the diversification of gas sources in Europe through the development of the Southern Corridor from the Republic of Azerbaijan and potentially other producing countries," he said in a statement.

TAP is the westernmost link in the Southern Corridor, meant to diversify a natural gas sector influenced heavily by Russian energy companies. Russia meets about a quarter of European gas demand, though much of that volume runs through Ukraine, where geopolitical issues threaten regional energy security.

Statoil last year sold off its 15.5 percent stake in the Shah Deniz gas field offshore Azerbaijan to Malaysia's Petronas for $2.25 billion. The divestment in part ends Statoil's role in the infrastructure planned from Azerbaijan.

"This divestment increases our financial flexibility and is in line with our strategy of portfolio optimization and capital prioritization," Jens Okland, a vice president for pipeline issues for Statoil, said in a statement.