EU & WBs / Albania Energy Market Updates

EU & WBs / Albania Energy Market Updates

Presentation of Albanian Centre for Energy Regulation and Conservation - ACERC

ACERC is a think tank centre with focus in Albania energy market and its integration on 8th Regional Area & EU IEM. The ACERC mission aim to provide a qualified contribution to the promotion of the liberalization and the effective integration as well as the efficient use of energy resources.

ACERC main activities profiles briefly consists in the release reports, articles and periodicals. In cooperation also with collaborates the offering of the activities that support capacity building of market actors, such as national and regional seminars, trainings and conferences. Initiatives completed by advocating in the energy sector promoting a forum called in Albanian School of Regulation.

For more visit us at the Official Website of Acerc | Albanian Energy Market - AEM Group in LinkedIn

Top economist calls for focus on energy security 31 March 2015

AEM Updates March 2015Posted by Adv. Lorenc Gordani, PhD Tue, March 31, 2015 17:38:54
Top economist calls for focus on energy security
31 March 2015



The International Energy Agency needs repositioning on energy security related issues, the agency’s top executive said in Ankara Monday. "The importance of energy security will increase in the international political agenda (because of the ongoing crises in the world)," Fatih Birol, who is currently the chief economist at the 29 member strong agency, said.

Birol made the remarks at a ceremony held in his honor for getting selected as the next executive IEA director. He is expected to take charge in September 2015. Undersecretary of the Turkish Ministry of Foreign Affairs Feridun Sinirlioglu was also at the event.

About the importance of energy security, the Turkish economist said that energy security had become all the more important because of the ongoing crises in the world, including the chaos in Ukraine.

Despite regional chaos, oil and gas producing countries such as Saudi Arabia, Yemen, Libya, Syria and Nigeria will remain important suppliers, Birol added.

The economist also spoke about the importance of climate change, an issue that was expected to be discussed at a global climate change conference in December in Paris. He noted that 80 percent of carbon emissions of the world came from the energy sector that adversely affected the climate.

"When IEA was founded, the share of IEA member countries in energy consumption was 80 percent, which is now 50 percent," he said.

"Turkey is not just a market for energy, it is also a safe and sustainable route for its energy rich neighbors to transfer their energy supplies in a safe way," Sinirlioglu said.

The undersecretary also spoke about the importance of the Trans Anatolian Natural Gas Pipeline or the TANAP and the Baku-Tiflisi-Ceyhan pipeline projects.

TANAP is part of a project that will carry natural gas from Azerbaijan's sector on the Caspian Sea, passing through Turkish territory to enter Greece, to further travel to Albania and then Italy to reach Europe. When completed, TANAP will carry around 16 billion cubic meters of gas per year to Europe.



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Energy Market WEEK 13 OVERVIEW March 29th, 2015

AEM Updates March 2015Posted by Adv. Lorenc Gordani, PhD Mon, March 30, 2015 11:47:17
Energy Market WEEK 13 OVERVIEW
March 29th, 2015

The 13th week of the year has been characterised by slow developments in the gas industry with potentially significant geopolitical ramifications. The decisions taken in Kiev, Cairo and Beijing are likely to affect the evolution of geopolitics in Europe and beyond. At the moment, the spotlight is on Yemen, but European news is equally important.

1. Under western pressure, Ukraine’s President Petro Poroshenko is trying to create a state with a stronger central government able to keep oligarchs under control. Implications on security in Eastern Europe and the prospects of a stable central government remain unclear.

2. At the same time, Total Chief Executive Patrick Pouyanne made a remark in his interview to The Wall Street Journal. He said that the France-headquartered company is now seeking Chinese financing - up to $15 billion - to fund its $27 billion LNG project in Russia.

3. Finally, Egypt is trying to increase domestic production. Cairo signed several deals to increase the purchase price of gas extracted from new developments by around 40%. This could have an impact in gas production over the next 5 years.

Against this backdrop, the political campaign in the United Kingdom gained momentum. After a strongly politicised Budget Speech earlier this month, the Conservatives position, should they win, their support the gas industry.

UKRAINE: BETWEEN A TORMENTED PAST AND AN UNCERTAIN FUTURE

The Government of Ukraine said on Wednesday that the country will start investigation on Serhii Bochkovsky, Chairman of the State Emergency Service of Ukraine, and his first deputy Vasyl Stoyetsky. While Europe is committing to new measures to support Kiev, the Cabinet of Ministers informed Bochkovsky and Stoyetsky they are suspected of organisation of criminal schemes and transferring funds through offshore companies.

A few hours later, Ukraine confirmed its interest in restoring gas supplies from Turkmenistanduring President’s Petro Poroshenko’s meeting with Turkmenistan’s Minister of Foreign Affairs Rasit Meredow on Friday.

However, those are long-term plans, and Kiev is called to take more urgent decisions. Ukraine will decide whether it will buy Russian gas from April 1. It will do so considering the conditions, the price and the need for fuel, said Ukraine’s Minister of Energy Vladimir Demchsyshyn at the end of the Cabinet of Ministers on Monday.

It comes as little surprise that Naftogaz is still hopeful about the prospect of signing another gas deal with Gazprom when the the current “Winter Package” arrangement expires at the end of March. Any temporary agreement is expected to be subject to the arbitral award in the on-going arbitration between Naftogaz and Gazprom, Naftogaz CEO Andriy Kobolyev commented.

Meanwhile, Naftogaz reports that Ukraine holds the largest volume of stored gas in Europe.Ukrainian reserves amounted to 7.74 billion cubic meters (bcm) as of March 22.

The storage facilities are depleted gas fields which were originally produced in the 1950s and they are all in Western Ukraine. According to Alan Riley, these “safe” facilities are close to all the Central European consumers, and could come in handy to store eventual shale gas produced in Western Ukraine.

NORTH AFRICA AND MIDDLE EAST: EGYPT, ALGERIA, LEBANON, CYPRUS

Egypt’s Minister of Petroleum and Mineral Resources Sherif Ismail signed a deal to increase the purchase price of gas extracted from onshore Nile Delta Disouq by 40%. RWE Dea has pledged to raise production.

Algeria made the headlines too.The development program designed by Sonatrach for the period 2015-2019 encompasses about thirty treatment projects, 18 for natural gas and 11 for crude oil. The Algerian company expects to be drilling 260 wells per year.

On the other hand, the commercial development of Lebanon’s hydrocarbon reserves faces many internal and external challenges. Lebanon’s hydrocarbon sector and its institutional and regulatory framework are still in their infancy, Bassam Fattouh, director of the Oxford Institute for Energy Studies, says in an interview.

Italy-based Eni and Korea Gas Corp (KOGAS) came up dry in Cyprus’ waters for the second time in recent months. Nicosia said that the “disappointing” result does not change the prospects of Cyprus’ gas.

TURKEY AND THE SOUTHERN CORRIDOR

As mentioned, the prospects of the Trans-Caspian pipeline are getting brighter, as recent diplomatic meetings hint at a growing focus on Ashgabat’s role in Europe’s energy security. After European officials confirmed on Wednesday that Maroš Šefčovič will visit Turkmenistan in the coming months, Ukraine’s Prime Minister Arseniy Yatsenyuk met with Rashid Meredov, Turkmenistan's Minister of Foreign Affairs.

The Southern Corridor moved on several fronts: Turkey stressed its commitment to realise the TANAP, while Tirana and Rome throw their weight to back the TAP pipeline.

Turkey's Energy Minister Taner Yildiz said that TANAP project will expand the EU's demand for Azeri natural gas. In a press briefing in Istanbul with International Energy Agency's Chief Economist Fatih Birol, Yildiz said that the European Union demand will increase gradually with increasing need of diversification and energy supply security.

Meanwhile, Azerbaijan has re-started development of the Umid gas field. On March 19, SOCAR drilled an appraisal well. Khoshbakht Yusifzaheh, Vice-President of Azerbaijan’s state oil and gas company (SOCAR), told Natural Gas Europe that the firm has announced a tender.

Despite this progress, the Southern Gas Corridor remains unfinished business, writes Manfred Hafner. ‘On the basis of the past experience we can expect this story to be complicated, under certain perspectives even byzantine, but certainly also fascinating and full of twists.’

Alternative projects from Turkmenistan are suffering too. A combination of factors such as the oil price fall and uncertainty about transit via Afghanistan is likely to further delay the launch of the Asian Development Bank-backed TAPI. The estimated cost of the gas pipeline has increased from $7.6 billion to $10 billion, and the estimated price based on oil-linked formula dropped from $10-$11 per MMBtu ($360-$380 per 1,000cm) to $7 per MMBtu ($250 per 1,000cm).

Albanian government officials have gone on record to promote the Trans Adriatic Pipeline (TAP),stating it will be a good investment for Albania and its economy.

Amidst regional opposition in the Apulia region, Trans Adriatic Pipeline AG (TAP) issued a contract notice for the construction of the Pipeline Receiving Terminal (PRT) and the installation of an onshore pipeline in Italy. On Wednesday, TAP explained that the work will cover engineering, procurement and construction of the terminal and the 8-kilometre long pipeline connecting the terminal to the first dry weld at landfall in Italy.

EUROPE: GERMANY, INTERCONNECTORS, AND UK BEFORE THE ELECTIONS

In line with a consolidated trend, Germany further increased its focus on the energy sector and the related geopolitics, signing a declaration of intent with Algeria and meeting with Cyprus’ officials.

Brussels is less focused on foreign affairs, and is paying more attention to internal developments.European institutions declared their interest in starting the construction of the North-South Corridor of energy, transportation and telecommunications, the Central Europe Energy Partners (CEEP) said on Tuesday, after a high-level conference in Brussels with Maroš Šefčovič, European Commission Vice-President for Energy Union. According to CEEP, the cost of these projects equals €50.5 billion, with the majority going to finance energy (€27 billion) and transport projects (€20 billion).

Several countries are trying to lure investments, also to increase domestic production. Zagreb is planning to sign production sharing contracts for oil and gas exploration at the end of May, the first of such kind in the country's history. ''Croatia will surely be an exporter of natural gas,” Ivan Vrdoljak, Croatian Minister of Economy told Natural Gas Europe in an interview.

Private interests across Europe are emerging too. Vermillion obtained a one year extension of an exclusive drilling license in Saint-Just-en-Brie, 50 miles south east of Paris. The top oil producer in France, which holds 70,000 hectares in an area with potential shale gas reserves, could take advantage of eventual political twists in the country.

But these plans are not going to translate into production in the coming months. The oil and gas industry is cutting its 2015 exploration budget by 30%, Wood Mackenzie wrote on Thursday, adding that drilling activity in 2016 is set to recover given a simultaneous 33% decrease in exploration costs.

All in all, it seems clear that Europe’s energy security will come from interconnectors rather than from domestic production. On Thursday, two announcements made this even clearer. Shell UK plans to reduce the number of staff and agency contractors who support the company's operations in British waters by at least 250 in 2015. Meanwhile, National Grid and Statnett announced the final investment decision for a 730-kilometre interconnector between Norway and the UK that should be completed by 2021.

The United Kingdom continues investments in the energy sector, On Friday, it reiterated its commitment to support Carbon-Capture-Storage (CCS) technologies.

London also continues in its effort to support domestic oil and gas production, launching on Monday a consultation on the design of the levy to fund the new Oil and Gas Authority (OGA).

Meanwhile, the debate over shale gas is increasingly regaining footing in England, with shale enthusiasts putting new proposals on the table, and shale skeptics equally voicing their opinions. In this context, Task Force on Shale Gas proposed a single regulator in charge of both permitting and oversight.

BALTIC STATES ASK FOR LNG, MORE TRANSPARENCY

As said earlier this year, Lithuania is trying to be the first European country to receive US LNG deliveries, as early as 2016. Vilnius will have to compete with Spain to achieve this goal.

Baltic states, Poland, and other countries are seeking more transparency and security in Europe’s energy sector. Brussels wants to end secrecy of deals like the one signed by Hungary’s prime minister and Russia’s Vladimir Putin in January. The Hungarian parliament voted to ban for thirty years the release of any details of the deal to finance and build a second nuclear power plant in Paks.

WE ALSO PUBLISHED:

Europe: when will LNG come back home?

FMC Technologies, Technip create 50/50 Joint Venture for subsea projects

If Europe wants to embrace natural gas as a bridge to a low-carbon future, it should draw from America’s success

Bulgaria in the energy doldrums

South Stream not legally stopped, certain activities to continue

Sergio Matalucci





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National survey on perceptions & expectations towards a potential EU membership of Albania 28 March 2015

AEM Updates March 2015Posted by Adv. Lorenc Gordani, PhD Sun, March 29, 2015 15:50:07

National survey on perceptions & expectations towards a potential EU membership of Albania
28 March 2015



"Freedom doesn't come from outside, it comes from inside. This is what the EU integration process is about", EU Ambassador Romana Vlahutin said during a panel discussion following the "2014 National Survey on the European Perspective of Albania – Perceptions & Realities" presented yesterday at the EU Info Centre in Tirana.

The study provides insights on the level of knowledge and understanding that Albanians have about the European Union, its institutions, its business, and what the EU integration process means. The study sheds light on the information channels mostly used by them when seeking information about the EU and European integration and explains the factors that influence shaping Albania’s public opinion with regard to EU affairs. In addition, the study provides an insightful analysis of these factors, with recommendations about how to improve the communication about the EU. A lively debate among civil society and media representatives, Head of EU Delegation and Minister of Integration followed the presentation of the results.

Read more about the survey results: http://eualbania.eu/wp-content/uploads/2015/03/Survey_full_report.pdf



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The Fifth Round of the Albania – EU High Level Dialogue, Published on : 24 March 2015

AEM Updates March 2015Posted by Adv. Lorenc Gordani, PhD Sun, March 29, 2015 11:10:27

The Fifth Round of the Albania – EU High Level Dialogue
Published on : 24 March 2015



Joint press conference of Prime Minister Rama and Commissioner Hahn following the Fifth Round of the "Albania – EU High Level Dialogue":

First of all I would like to publicly welcome the Commissioner on his first visit as Commissioner in Albania. Also, I wish a successful common journey in view of the progress of Albania and the region on the path of European integration.

That said, I want to express gratitude to the Commissioner for his personal direct involvement in continuing the dialogue and for his clear commitment to strongly support Albania in this process of historical significance for us.

Of course, this was the first opportunity I had to show the Commissioner a sincere appreciation for European Commission ‘s ongoing commitment to the enlargement process in general and to Albania and the region’s European perspective in particular. This meeting was actually a confirmation of this mutual engagement

On our side, we have emphasised the results of state-building reforms and confirmed our firm willingness to deepen them according to the five key priorities set out in this stage of Albania's path towards the European Union. In our view, these five priorities are an irreplaceable instrument of incitement.

Let me underline the Government’s intense commitment to domestic reforms, but also to having an active role in strengthening the European dimension of the region, which has taken a new dimension thanks to the process opened in Berlin, at the meeting organized by Chancellor Merkel, along with prime ministers of Southeast Europe countries.

Work on the five priority has been intensified and some important developments have occurred since the last meeting, both from the legislative point of view by improving the regulatory and institutional framework, and also in consolidating the balance that so far has shown to be progressive with a focus on fighting crime and corruption.

We informed the Commissioner on the current stage of the justice reform, as a structured and comprehensive process that gives us since today the guarantee of a product that will close a long era of transition characterized by systemic decay of the justice system, and which will establish the institutional foundations of a European justice system based on the rule of law.

I expressed to the Commissioner my conviction that this is the deepest and most inclusive process, where the energy consumption required can be compared only with the process of writing the new Constitution of the Republic of Albania. For this reason, we asked the Commission to consider, through the Commissioner, the compliance of this process with a positive precedent of Montenegro, where the opening of Chapter 23 and then Chapter 24 of the negotiations, in the form of a conditional process, led to moving forward to a successful negotiation process.

We have confirmed our will for a comprehensive process with the opposition. Even today we had the pleasure to have a meeting where the opposition spoke more than the government, which is in our view, an expression of our need to listen as much as possible to the opposition, given the deficit created after a considerable period of abandonment of all spaces of cross-political debate and dialogue.

Even the decision of the Assembly on creating the National Council of European Integration, whose chairmanship we have willingly entrusted to the opposition, is proof of our commitment to have a political dialogue, and more than a commitment, this is proof of our need to have the opposition by our side, meaning in front of us, in order to walk side by side with the opposition, having as much interaction as possible and creating the conditions to listen to the opposition as much as possible.

Finally, I want to emphasize that it is obviously clear to us that we are not living in Europe’s best politics time to talk about enlargement. However, this is the region’s most delicate time to not push the enlargement process consistently and decisively further. And for this reason, we look at negotiations between Albania and the European Union not as another step in a process, but as the process itself.

Thank you Commissioner for your visit to Albania and for your two-day stay here. I hope that this meeting that took stock of the job done since last September, has made you more optimistic and at the same time, this visit has given you more reasons to return in Albania soon .

Answers – Questions:

-Mr. Prime Minister, yesterday the opposition presented a platform whose changes require an intervention in the Constitution. At what degree is the majority ready to intervene in the Constitution with regard to the decriminalization of the Parliament? Thank you!

Thank you, but I haven’t seen what the opposition has presented. Today I saw the opposition and tomorrow, maybe, we will see what the opposition has presented, and then we will answer once we have an idea of what it is about.

-What are the reforms that, according to you, deserve more attention? You did mention justice, but from what we have seen the pace hasn’t been that fast.

To answer on the progress of the judicial reform, I will refer to the Commissioner's speech according to which the quality of the process is very important. Of course, for us, not for the European Union, but for us speed is also important.

So, we are very confident that the judicial reform is going through a quality and fast process. Likewise, we are very confident that in the fall, we will give the Commission everything as required by the 5 priorities, if we refer to written assignments. For this, I asked the Commissioner to grant a stable and predictable process, without additional requirements along the way, but allow Albania to deliver results one by one according to defined tasks within the framework mutually agreed.

Of course, I want to believe strongly the Commissioner’s words that the situation within the European Union and particularly in some countries massively against the enlargement, as opinion polls show, will not be an obstacle. However, what remains crucial for us, regardless of the situation in the European Union or what part of the decision will be conditioned by the present situation in the European Union, is that we are in the process and will modernize our country in every step. Because for us, as have said since the first day we sat at the Government’s table, European Integration is neither a trip to Brussels nor sending in Brussels letters of the laws we pass, but it is building European Albania here. Building a country that functions like any other European Union member country, here, in our country, for our people. To do this, we enjoy the irreplaceable assistance of the integration process, with every instrument that this process makes available to countries that want to be innovate and integrate.

So, at this moment, our job is to implement consequentially our project of European Albania and consequentially fulfil every task assigned by the Commission on the 5 priorities. Then, of course, the rest is up to the Commission, the Member Countries and to the leadership in member countries. And it remains to be seen how much will be decided by the leadership and how much by the polls.

***

Earlier Prime Minister Edi Rama met with EU Commissioner for Neighbourhood Policy and Enlargement Negotiations, Johannes Hahn who is in Tirana for the meeting on the "Albania-EU High Level Dialogue".



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Expanding the European Electricity Market15 April 2015

AEM Updates March 2015Posted by Adv. Lorenc Gordani, PhD Fri, March 27, 2015 16:22:21
Expanding the European Electricity Market15 April 2015

Signature of a Long-Term Agreement on the permanent synchronous operations of the Turkish Power System with the Continental Europe Synchronous Area

Already the largest interconnected grid in the world, the Continental European grid will officially welcome Turkey on 15 April. The enlarged synchronous area will supply an additional 75 million customers. ENTSO-E is pleased to invite you to the official signing ceremony of the Long Term Agreement, on 15 April 2015, from 11.30 to 13.00, in ENTSO-E offices Avenue de Cortenbergh 100, Brussels

What does it mean for the Internal Energy Market?

By signing the long-term agreement, the Turkish Transmission System Operator (TSO) TEIAS commits to promote the implementation of the Third Electricity Package in Turkey. This includes in particular provisions related to performing market transactions and congestion management. TEIAS also commits to permanently comply with the technical standards of the Operation Handbook of the Continental European synchronous area, and with the operational and balancing network codes, when they enter into force.

The expansion of the Continental Europe Synchronous Area reduces the need for frequency containment reserves to be kept by single TSOs and marks a new step in the development of the EU's cooperation with Mediterranean countries. TEIAS will also become an Observer Member of ENTSO-E.

Programme and how to register

The event will feature the participation of ITRE Committee Chair Jerzy Buzek MEP, TEIAS CEO Kemal Yildir and ENTSO-E Chaiman of the Board Pierre Bornard. Lunch will be provided.

View the programme

Please register via the form below by 3 April 2015.



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Albania Counts Cost of UK Tax Consultants, Gjergj Erebara BIRN Tirana 25 MAR 2015

AEM Updates March 2015Posted by Adv. Lorenc Gordani, PhD Thu, March 26, 2015 16:40:11

Albania Counts Cost of UK Tax Consultants

The UK firm Crown Agents is hoping Albania will extend its €4.1 million annual contract - even though the expected rise in customs revenues has yet to materialize.

Gjergj Erebara BIRN Tirana 25 MAR 2015

“Before I came here, I lived in Skopje. Cigarettes are cheaper there,” says David Smith, representative in Albania of the tax advisor company Crown Agents, while lighting up at the entrance of the General Directorate of Customs in Tirana.

Smith is correct. Tobacco costs more in Albania than in Macedonia or other neighboring countries. Prices in Albania rose by 50 leks - €37 cents - over the last two years, owing to higher taxes.

Smith, meanwhile, leads a group of foreign consultants that Albania is paying €4.1 million per year to improve tax collection, curb tax evasion and smuggling and clean up corruption and mismanagement in the customs service.

Neither the tax increases of the last two years nor the expertise of Crown Agents has paid off for Albania, as yet.

The government led by Edi Rama signed a contract with the Crown Agents in 2013. The international tax consultants firm maintains a presence in two-dozen countries. The contract with Albania obliges Crown Agents to help customs to improve the application of rules and laws, identify and fight fiscal evasion and smuggling and apply modern methods of risk analysis and management.

The contract promised to increase government revenue from customs by 1 per cent of the Gross Domestic Product per year, equal to almost €100 million. It stipulates that IMF estimates on Albania’s GDP would be used as reference to avoid any misunderstanding.

The contract says Albania has the right to withdraw from the deal after the first year if the revenue targets are not met, or extend the agreement if the program is successful.

Neither has happened. This month the government admitted in its Letter of Intent to the IMF that the “big boost to collections expected at the time of signing has not yet been realized”. In spite of that, the government has decided against using its right to withdraw from the contract. “The work by the external consultant on customs administration will continue,” it said.

“We have fulfilled all our contract obligations, but not the target of the revenues, for which we are sorry,” Smith told BIRN in an interview on 23 march 2015.

Over the course of 2014, Albania collected about 150.7 billion leks - about €1.07billion - in customs. GDP stood at about 1.4 trillion leks - €10 billion. Revenues from customs in 2014 therefore were worth 10.8 per cent of GDP, just 0.4 per cent higher than in 2013.

In the meantime, the government increased taxes on tobacco and fuel, which the customs administration collects. The new taxes and as well as the efforts of Crown Agents ought to have increased revenue by a full 2 per cent of GDP. Since revenues grew by just 0.4 per cent, neither the tax hikes nor the consultancy can be said to have delivered results.

Meanwhile, Albanian taxpayers are paying €4.1 million for the consultancy, plus increased prices on goods.

The government is expected to decide later this year whether to extend the contract with the consultants. The Prime Minister’s office did not reply to emailed questions from BIRN on the rationale of continuing the agreement with Crown Agents.

During the interview with BIRN, Crown Representative Smith maintained that government revenues had in fact risen by 0.8 per cent of GDP, including revenues earned from higher taxes.

Queried on how he reached this figure, he said Crown office was only drawing on a statement from the Ministry of Finance. “We had a problem back on January 2014 because tax hikes were announced well in advance, so many people bought cigarettes before the tax increased,” he said.

“We saw a big drop in declared imports of the cigarettes last year in Albania. This created significant lost revenues for the government. The question is why this happened,” he added.

According to Smith, the drop is partly down to increased imports late in 2013, designed to avoid the expected rise in excise duties, and partly because of an increase in smuggling.

“The tax increase in January 2014 made cigarettes significantly more expensive in Albania than in neighboring countries, which increased smuggling,” he said.

Cigarette smuggling cannot be traced with usual inspections, which is what Crown Agents does, he noted. “You need to have intelligence [services] to fight that kind of smuggling,” he said.

When the government signed a two-year agreement with Crown Agents back in 2013, it considered the deal an instrumental factor in delivering its electoral promises.

During the election campaign, Rama’s Socialist Party had lamented the poor state of the government budget and had pledged to contract the customs administration to an “international agency specializing in the field”, which it said would result in a dramatic fall in corruption in the sector and yield much needed revenue.

According to Smith, the expected increase in revenue equal to of 1 per cent of GDP remains a realistic target.

“We estimate that tax evasion eats out 15 to 20 per cent of the all possible customs revenues, equal to about €220 million a year,” he said.

Smith said that lack of rigour and coordination in the customs service was to blame for much of the untaxed imports.

“We have found fake tax stamps in the market,” he said. “Occasionally, we opened a box of beers where in the first row has tax stamps and the rest doesn’t,” he noted.

He said inspections by Crown Agents had identified scores of cases of contraband, which could have brought the government millions of euro.

Smith admitted that the consultancy program offered by his and other companies is expensive. “Fiscal administration should cost something like 1 or 2 per cent of the actual revenues,” he said.

While the cost of the program is €4.1 million, and the benefits remain unclear, Smith defends the current situation. “I believe our program is worth it and should be extended for the third year and possibly renewed further,” he said.

The government, meanwhile, has further increased taxation on fuel and tobacco.



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EU leaders confirm commitment to Energy Union Friday, 20 March, 2015

AEM Updates March 2015Posted by Adv. Lorenc Gordani, PhD Sat, March 21, 2015 20:19:09
EU leaders confirm commitment to Energy Union

Friday, 20 March, 2015

The EU leaders met on 19 March to set out the first steps of an Energy Union. The European Council strengthened their commitment for affordable, secure and sustainable energy within the EU.

At their meeting, their discussion focused on energy security and transparency in gas contracts. All gas contracts must be in line with EU law, more transparent and should not negatively impact Europe's energy security.

EU leaders also agreed to:

  • develop innovative strategies for a new generation of renewable energies and increase energy efficiency
  • step-up the EU climate diplomacy for a successful Paris climate summit in December 2015

Read the European Council Conclusions on the Energy Union

Download President Juncker's presentation on the Energy Union

Read more on Energy Union



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TANAP CONSTRUCTION TO COMMENCE IN APRIL MARCH 16TH, 2015

AEM Updates March 2015Posted by Adv. Lorenc Gordani, PhD Thu, March 19, 2015 14:23:46
TANAP CONSTRUCTION TO COMMENCE IN APRIL MARCH 16TH, 2015 12:20AM
In advance of the upcoming inauguration ceremony of the Trans-Anatolian Natural Gas Pipeline(TANAP), Natural Gas Europe had the opportunity to receive the views of Magsud Mammadov, Director for External Relations of TANAP at the sidelines of the Adriatic Oil and Gas conference recently held in Budva, Montenegro.

Azerbaijan's Shah Deniz field (SD2) in the Caspian Sea, one of the world's largest gas fields, which is being developed by a BP-led consortium.

"It is expected the pipeline will be completed by the end of 2019 in order to start deliveries of gas from Shah Deniz II to Europe in 2020", commented Magsud Mammadov.

Mr. Mammadov relayed that TANAP will also have the capacity to welcome other suppliers, which would benefit the European energy market.

What is timeline for TANAP to be constructed and to allow deliveries of gas from Shah Deniz 2 to European customers?

The construction period will last four years. We are starting with construction in April 2015 and first phase will end at 2018. That year, six billion cubic meters of gas will be delivered to Turkey and in 2019, TANAP will be ready to deliver 10 billion cubic meters of natural gas to Europe.

Will TANAP change the energy map of Europe?

This is a pipeline which is going to become an initial stab into Europe. In what sense? In a sense that it is going to be a initiative pioneer which will create the way and encourage other suppliers to reach European gas market. If we think of it as highway, this is just the first lane.

Can you discuss the level of co-operation between Turkey and Azerbaijan in the development of TANAP?

Cooperation between Turkey and Azerbaijan is on the highest level. Through this project, it has been shown that the two sides has been very supportive to each other, proven by the series of agreements which the two states have signed, the good level of cooperation between the governments and the good level of cooperation between the domestic companies.

As you know, TANAP will be operated by SOCAR, which currently holds 58% stake in the project. Turkey's pipeline operator BOTAŞ own 30%, while BP committed to acquire 12% in the project, but this has still to complete (see related article). The TANAP project company will be headquartered in Ankara, Turkey.

Turkey plans to develop the project called Turkish Stream to deliver Russian gas to the Turkish-Greek Border. How does this impact TANAP?

We do not think that this project will be impacting TANAP because this proposal was announced in December 2014, and the TANAP project has already been ongoing for about two years - a lot of work is already done. Therefore, we do not think it will be effect TANAP. The other thing is our buyers are already known who are committed to buy gas from TANAP.

Does that mean that you already have contracts in place for the gas you will supply?

Yes, that is correct.

How can TANAP assist with providing gas supply to the Balkans?

It is a good thing that TANAP is going to join with the Trans-Adriatic Pipeline (TAP) from which one of the Balkan counties, Albania, will benefit. By that I mean infrastructure, work places and everything that goes with it. There is also Ionian Adriatic pipeline which is planning to be built through Croatia and other countries. That means that the Balkan region can benefit from TANAP. Balkan countries will not only have access to a new gas source, but also benefit from transit fees and pave the way for further development of interconnectors in the region. But let me just say that these projects are also in the best interest of European Union and its energy policy and the EU can play a key role in the creation of the projects.

Are there plans to expand TANAP? Which countries other than Azerbaijan can potentially supply TANAP with its gas reserves? Does that mean building of new pipelines in order to connect with TANAP and if yes, will the TANAP project provide financial help to planned and prospective branch pipelines?

I can tell you about the potential suppliers of TANAP, rather than potential expansion of it. The negotiations with Turkmenistan gas about supplying TANAP are still ongoing. The Iraqi gas in the northern region can potentially be an exporter to TANAP gas. If you look at the recent developments in natural gas exploration in the Eastern Mediterranean area, those reserves can be shipped via TANAP. All this means that more gas can be delivered in Europe. In terms of delivery, The maximum capacity of TANAP is aimed to reach up to 31 billion cubic meters.

Europe has seen plans for the two major gas project, NABUCCO and South Stream collapse just two years. Should we be skeptical of TANAP's success?

I think it is opposite. If there is a pipeline project that is going to succeed, then it is going to be TANAP. It is because everything is going on schedule so far, we are ongoing in the construction process, we already have the contractors.

One of the best things about TANAP is that it is passing through six countries. That corridor is actually bringing together those six countries and eleven companies to work together. The Turkish Prime Minister has said that TANAP is a project of peace. While sometimes it is not easy to bring even two countries together for economic cooperation, this project has seen six countries collaborating. TANAP is a project from which natural gas rich reserves of the countries of the east of the project, will meet with gas importing countries in the west.

Related Article: BP's Next Step Towards TANAP



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