Azernews.Az

Akbar Novruz

Read more

In the early hours of Monday, 5 May, Italy's Prime Minister Giorgia Meloni will board a flight from Yerevan, where she will participate in the European Political Community summit the day before, to Baku (or maybe Gabala) for a one-day bilateral meeting with Azerbaijan's President Ilham Aliyev. This timing was deliberate. The EPC summit in Yerevan on 4 May is a multilateral forum of Europe. But the visit to Baku on 5 May is where Italy conducts its actual energy interests. In an interview with La Repubblica this week, Elchin Amirbayov, Azerbaijan President's Representative for Foreign Policy, noted: "This visit confirms that we consider there is considerable potential for enhancing cooperation in various fields, starting with energy, which Italy represents for us as a main partner." That visit, he could have added, is being made because the pipeline between them is full, and Europe does not want it to be.

In 2025, the Trans Adriatic Pipeline delivered 9.5 billion cubic metres of natural gas from Azerbaijan to Italy – accounting for roughly 16 percent of Italy's total annual gas consumption requirements, the grid operator of Italy. In less than five years, it has become one of the fastest-ramping new energy infrastructures in Europe, having already supplied more than 47.5 billion cubic metres of natural gas since starting commercial operations in November 2020. Following the completion of its first expansion phase, initiated due to the market test in 2021, TAP has been operating at an increased capacity of 11.2 bcm per year through the installation of a compressor station with a power capacity of 15 megawatts at the Kipoi facility located close to the Turkish-Greek border. Of this extra 1.2 bcm, one billion cubic metres will go to Italy, and the remaining 200 million cubic metres will be delivered to Albania. For the first time, natural gas is being transported northward to Austria and Germany through the new Caspian Corridor.

Capacity challenge

TAP’s expansion objective was built to accommodate volumes of up to 20 billion cubic meters per year, double its design throughput. The European Union and Azerbaijan committed to expanding the Southern Gas Corridor in a Memorandum of Understanding reached in July 2022, aiming for an increase in supplies to the EU to at least 20 bcm per year, with 2027 being the proposed deadline. This goal has proven elusive thus far; the first step towards the expansion to 11.2 bcm involved a market test back in 2021, and the increased capacity became available in January 2026. Another expansion phase – one that might materialize as early as late 2027, which hinges on yet another market test resulting in sufficient demand guarantees from shippers.

Expanding TAP from 11.2 bcm to 20 bcm requires the construction of two entirely new compressor stations, one in Greece and one in Albania, plus additional compressor units at existing stations. The pipeline's route through northern Greece and mountainous Albania means these are not trivial civil engineering projects. The cost of full expansion to 20 bcm is estimated by TAP AG at several hundred million euros, though a precise figure has not been disclosed publicly. Beyond the pipeline itself, full expansion also requires upstream investment to increase production at Shah Deniz and potentially other Azerbaijani fields, investment that SOCAR and bp must commit to before additional volumes can be guaranteed to European shippers. Amirbayov said this week with notable frankness: "Any further increase in exported gas volumes will require additional upstream investments in development and pipeline capacity." That is not a technical caveat. It is a negotiating position ahead of Tuesday's meeting.

So, currently, both Phase - 0 and Phase - 1 expansions are operational. Further Phase 2, i.e., the second expansion, is under consideration; further increase can be up to 20 bcm. It will involve the construction of new compressor stations in Greece and Albania, as well as additional compressor stations in existing compressor stations. The implementation will depend on the results of the market test in 2023; the earliest possible realization will take place in late 2027.

Full capacity - ceiling 20 bcm/year, which represents double the original capacity. It includes full expansion of compressor station facilities and upstream operations at Shah Deniz/new fields.

Enter Meloni

All that said, here comes Italian PM Meloni's trip, which amplifies Rome's leverage. Italy, in the last two years, has managed to quietly convert itself from being a gas consumer to being a gas transit country. Beginning from January 2026, Azerbaijani gas has started to flow north through Italy to Austria and Germany – an economic relationship that seemed unlikely to even occur by 2021, when Germany still relied on gas transported through Russia and did not really have a need to turn south for gas from the Caspian. The war in Iran has made it possible for every European government at once.

For Rome, however, this development has very clear political implications as well. In other words, not only does Italy now import Caspian gas from Azerbaijan, but, at the same time, it is the gateway to this gas supply for the entire continent of Europe. Perhaps, every strategic lever in the Caucasus is also a new exposure. With increased significance for Italy in continental energy infrastructure comes increased vulnerability to threats to the energy corridor from the TAP, as well as from the possibility of geopolitical tensions, technical disruptions, and even possible legal challenges. To be sure, there has been a legal challenge filed against TAP AG in Lecce, Italy, on the grounds of an environmental violation by TAP AG during the process of pipeline construction, a case still pending since 2020.

There is also the broader picture, one beyond the gas contracts - renewable energy. For instance, Ansaldo Energia is tied to the modernisation of Azerbaijan's Mingachevir power plant, the country's largest electricity generation facility. Back in 2024, during Baku Energy Week, I had the chance of encountring with CEO of the company, Fabrizio Fabbri. He disclosed the company's ambitious plans for the installation of a highly efficient power plant in Mingachevir, Azerbaijan. Highlighting the environmental impact, Fabbri emphasized, "Compared with the current power plant, we're going to increase the efficiency from 38 to 56%, saving the emission of 2 million tons of CO2 per year and 800 million cubic meters of gas for the country."

A year later, in June 2025, the inauguration ceremony took place. Ansaldo Energia supplied four advanced AE94.3A gas turbines and four generators for this landmark installation. The AE94.3A gas turbine stands out for its outstanding operational flexibility, proven reliability, and cost-effectiveness. The plant enables a significant reduction of CO2 emissions and an important saving of natural gas consumption. This facility, which has an energy capacity of 2,000 megawatts, will reduce emissions into the air by 50 percent compared to the past. The capacity of the power plant is 1,880 megawatts.

In terms of improving ties between Italy and Azerbaijan, during the January 2026 meeting of the intergovernmental commission, chaired by Deputy Minister Edmondo Cirielli, the Joint Action Plan for 2026-27 was devised, comprising 65 activities in 18 sectors, including energy, infrastructure, space technology, agribusiness, tourism, customs, and humanitarian demining. The involvement of humanitarian demining in this list deserves attention because Italy has considerable experience in clearing mines after wars, which will be relevant to the Azerbaijani programme for the reconstruction of Karabakh, where explosive munitions hinder the Great Return programme.

For the visit to advance the energy relationship substantively, it must achieve three specific things. Firstly, a political indication as to whether Azerbaijan will be able to make the downstream investment commitment for Shah Deniz and possibly the Absheron field, which can ensure the supply volumes required to make the compressor station investment in Greece and Albania worthwhile. Without such a political commitment for upstream investments, there is no need for an expanded pipeline network, which means that TAP has nothing to transport through its pipeline. Secondly, a timeline for the talks for the EU-Azerbaijan bilateral agreement which would put the energy cooperation into a greater legal context, establishing the regulatory dialogue necessary to expand TAP's activities.

It is rare for the geopolitics to align so perfectly for all three to progress. The Iran War has increased the value of Caspian supplies to levels never before seen since the Russian invasion of Ukraine in 2022. The Hormuz embargo has forced Europeans to consider diversifying their sources of supply in ways that would have taken months of reports and planning to achieve. Azerbaijan’s position as a neutral nation, maintaining links with Israel, Iran, Russia, and the EU, while remaining uninvolved in the associated conflicts, has actually been a source of stability amid instability.

*the image is generated by artificial intelligence