The European Commission gave its blessing Thursday to a deal struck by Greece for the construction of a new pipeline transporting gas from Azerbaijan, which is meant to reduce European energy dependence on Russia.
The 878-kilometre Trans Adriatic Pipeline (TAP) would help bring 10 billion cubic metres of gas per year from Azerbaijan's Shah Deniz II field to Italy, passing through Greece, Albania and under the Adriatic Sea. First deliveries to Europe are expected in 2020.
The deal Greece struck with the TAP companies foresees 25 years of tax benefits for the project.
The tax benefits could distort competition in the European energy market, but would be outweighed by the benefits that the project will bring, for instance in diversifying Europe's energy supply, the commission found.
"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," EU Competition Commissioner Margrethe Vestager said in a statement.
The joint venture of energy companies that will build and operate TAP plans to invest 5.6 billion euros (6 billion dollars) over five years in the project, 2.3 billion euros of which would be in Greece, according to the commission.