Photo from website: president.gov.ua
Azerbaijani President Ilham Aliyev, during negotiations with his Ukrainian counterpart Petro Poroshenko, invited Ukraine to take part in the Southern gas corridor"(UGK).
“The President of Azerbaijan invited Ukraine to participate in the Southern Gas Corridor project,” notes a message published on the official website of the President of Ukraine.
The parties also paid attention to further deepening cooperation in the energy sector.
The official opening of the Southern Gas Corridor took place in Baku on May 29 this year. With its help, Azerbaijan plans to deliver gas to the EU bypassing Russia. Along the corridor, “blue fuel” will be transported from the Shah Deniz field - through Turkey to the southern countries of the European Union - Italy, Greece, etc. The cost of the project is more than $40 billion. By 2020, it is planned to deliver about 10 billion cubic meters of gas to European countries. According to Aliyev, 7 countries are participating in the project: Azerbaijan, Turkey, Georgia, Greece, Italy, Albania and Bulgaria. Montenegro, Croatia, as well as Bosnia and Herzegovina plan to join it.
Some experts are confident that the Southern Gas Corridor cannot compete with the Turkish Stream, the second line of which will transport gas to European consumers.
Other analysts consider the launch of the SGC not very good good sign for Gazprom.
Thus, in the opinion of Nikolai Podlevskikh, head of the analytical department of Zerich Capital Management Investment Company, a positive aspect of the launch of the SGC can be considered that Turkey, by supplying gas to the southern EU countries, will get used to the role of a transit country, and in the future will ensure reliable gas delivery to the Turkish Stream "
The expert believes that the Southern Gas Corridor cannot satisfy Europe’s need for gas, even its southern states, so the Azerbaijani project will not become an alternative to the Turkish Stream.
Along with this, analysts consider the SGC not a very favorable sign for Gazprom: the launch of the project shows that there is competition in the market, and other gas pipelines may be built.
In this area, according to Raffeisenbank analyst Andrey Polishchuk, countries in the Middle East may compete with Gazprom in the future, however, given the political factor and instability of the region, the likelihood of the development of such projects is low.
At the same time, Gazprom has powerful advantages over its competitors - the scale of the Turkish Stream, its development potential, very large field reserves and its reputation.
“Unlike TANAP, Gazprom’s peak load can be much higher. Therefore, there are still no competitors yet,” the expert is sure.
Azerbaijan began developing the large Shah Deniz gas field in 2006. Two years later, against the backdrop of the gas conflict that arose between Russia and Ukraine, the European Commission approved the Second Strategic Energy Review, calling for expanded fuel supplies to Europe, bypassing Russia. In 2013, the route of the Southern Gas Corridor was finally approved. The project included: the already functioning Caucasus Pipeline and new ones - the Trans-Anatolian (TANAP) and the Trans-Adriatic (TAP). In 2015, the foundation of the TANAP gas pipeline was laid. The ceremony was attended by the presidents of Azerbaijan, Turkey and Georgia.
Azerbaijani President Ilham Aliyev took part in the opening of the Southern Gas Corridor (SGC), one of the links in a new gas pipeline chain that allows the supply of Caspian gas to Europe. At the ceremony, Mr. Aliyev did not talk about competition for Russian gas from Azerbaijan, but mentioned the need to “diversify sources” of fuel. Meanwhile, experts interviewed by Kommersant in Moscow and Baku claim: threats to exports Russian gas the project does not bear.
“With the implementation of the Southern Gas Corridor, we are re-drawing the energy map of the continent,” the Azerbaijani president said at the opening ceremony of the gas pipeline in Baku (quoted by TASS). If you look at the map, the project really looks large-scale - gas will flow from Azerbaijan to Georgia, then to Turkey, Greece, Albania, and finally reach the coast of Italy. Another line will go from Greece to Bulgaria. Later, other branches may be made from the gas pipeline - to Bosnia and Herzegovina, Croatia and Montenegro.
In addition to the quite expected Turkish Ambassador to Azerbaijan Erkan Ozoral, there were also unexpected guests at the ceremony: the British Prime Minister's Trade Envoy for Azerbaijan, Baroness Emma Nicholson and US Deputy Assistant Secretary of State Sandra Oudkirk. “I thank the leadership of Turkey and Georgia for their cooperation and support. I also thank the leadership of the USA, Great Britain and the European Union for the implementation of the project,” said Mr. Aliyev. Ms. Oudkirk, in turn, recalled: “US President Donald Trump has repeatedly stated his support for the project. In his recent letter addressed to the President of Azerbaijan, in honor of the centenary of the republic, he also emphasized that the Southern Gas Corridor is an incredible achievement that will ensure the energy security of Europe.” It is noteworthy that in the same letter, Donald Trump said that “in the coming months there will be an opportunity to resolve the Nagorno-Karabakh conflict, which will create even more opportunities for American-Azerbaijani cooperation.”
“The SGC project was lobbied primarily by Western states,” the head of the Baku club of political scientists said in an interview with Kommersant. South Caucasus"Ilgar Velizade. - Because it is Western companies that are the main developers of fields on the Caspian Sea shelf. As for the political component, everyone understands perfectly well that Azerbaijani gas cannot fully provide European states. While an open gas pipeline can transit not only Azerbaijani gas, but also Turkmen, Kazakh and Iranian gas.”
The expert did not rule out possible benefits for Russia. “Russian gas can also be connected to the corridor,” says Mr. Velizadeh. “On top of that, a convention on the Caspian Sea should be signed in the fall, which will reflect Russian interests. The capacity of the pipeline must also be taken into account. Now it is estimated at 31 billion cubic meters per year. Azerbaijan will supply only 16 of them.” Let us remind you that Moscow has its own project to be able to supply gas to Europe - “Turkish Stream”.
The Georgian delegation led by Deputy Minister of Economy Georgiy Chikovani was also present at the ceremony. One of the members of the delegation, energy expert Timur Gochitashvili, told Kommersant that what Tbilisi expects from the project is, first of all, the opportunity to buy gas at a discount. “Georgia will buy 5% of all gas passing through its territory at a preferential price - approximately two times lower than the market price,” said Mr. Gochitashvili. “And another 500 million cubic meters - with a smaller discount, but still cheaper than the same gas will be sold in Europe". This is really important for Tbilisi: the gas pipeline can provide 1.1 million of the 2.4 million cubic meters of gas consumed by the country, Kommersant’s interlocutor clarified.
However, gas supplies to Europe, which are already estimated at 10 billion cubic meters per year, will not begin before 2020 - the TAP gas pipeline from Turkey to Italy is not yet ready.
Turkey will receive its planned 6 billion cubic meters soon - the launch of the Trans-Anatolian Gas Pipeline (TANAP) is scheduled for June 12.
According to Russian expert- Alexey Grivach from the National Fund energy security- Azerbaijan will not constitute real competition for Russian exports. “On the scale of the European market, which is about 500 billion cubic meters per year, 10 billion, to put it mildly, is not much, only 2%,” said Mr. Grivach. “Competition will intensify in individual countries, but growth of the market itself cannot be ruled out.” At the same time, according to the expert, the republic’s grandiose plans to conquer the European market may not come true at all. “The deepwater part of the Shah Deniz field, where it is planned to produce gas, is a rather complex story with high risks. There is a possibility that reaching the design capacity will be delayed or will not happen at all, or supplies will be unstable,” warned Alexey Grivach.
Kirill Krivosheev, Yuri Barsukov; Georgiy Dvali, Tbilisi
In the abundance of gas pipeline projects in Central Asia and Transcaucasia today can be confusing. There is a certain TAP - Trans-Caspian gas pipeline, running from the gas fields of Turkmenistan along the bottom of the Caspian Sea to the Sangachal terminal of Azerbaijan. There is a South Caucasus gas pipeline from Baku, through Georgia, to Turkey.
Then there is TANAP - the Trans Anatolian Natural Gas Pipeline, which runs across Turkey to its border with Europe, where it becomes the start of two other gas pipelines - NABUCCO through Bulgaria and again TAP (Trans Adriatic Pipeline) through Greece, Albania and the Adriatic Sea to the Italian city of Brindisi. Everywhere we see different volume figures, different launch dates and even different degrees of readiness.
For a long time, all of the above resembled an attempt to divide the skin of an unkilled bear. At the heart of everything was the Azerbaijani Shah Deniz field, gas from which Baku wanted to sell directly to Europe, without Russian mediation. The interest of other countries was clear. Firstly, Georgia saw in the project an opportunity to obtain energy resources “not from Gazprom” (which promised to gain “energy independence”).
Secondly, the transit pipe to Turkey meant transit payments, to put it mildly, not unnecessary for the economy. However, the Turks viewed the issue in a similar way. Some of the gas goes to us, and some goes on for sale to the European Union. And not only them. The Greeks and Albanians looked at the “Azerbaijani pipe” in exactly the same way. And all together it was called the Southern Gas Corridor.
The other day it was even officially launched. On May 29, in Baku, the President of Azerbaijan attended the ceremony for the start of gas injection into the South Caucasus Pipe (also known as Baku-Tbilisi-Erzurum, BTE). As stated, approximately by June 12 of this year, the process of technological preparation will be completed and the first Azerbaijani gas will begin to flow into TANAP.
Thus, the Southern Gas Corridor, which bypasses Russia, will finally start operating, which means that the efforts of a pool of “small countries” to overcome the Russian gas monopoly and gain their geopolitical subjectivity have been crowned with success. The export of energy resources via a route not controlled by Moscow promises opportunities to expand independence in foreign policy. In theory. The reality, as always, turns out to be much more complicated.
Azerbaijan still does not have the 25 billion cubic meters of BTE pumping volume per year announced at the end of 2017. And the site itself allows only 18.6 billion cubic meters to pass through. It will be increased to its maximum only in 2020. And even then, it’s unlikely.
For the entire 2017, with all the investments in the development of the Shah Deniz field, Azerbaijan managed to produce only 10.2 billion cubic meters of gas, of which it is able to export no more than 9 billion. While for loading TANAP, combined with the desire to supply also at least 10 billion cubic meters to Europe, Baku needs to have an export capacity of at least 27-32 billion cubic meters. In the best case, it will be possible to reach the 18 billion mark no earlier than 2020-2022.
It follows from this that for the next five years, Azerbaijani gas will only be enough to meet Turkish demand. To some, this result may seem successful. In the sense that not so much for Baku, but for Ankara, which is weakening its dependence on Gazprom. But the numbers tell a different story. Of the 50 billion cubic meters of its consumption, 24-25 billion are supplied by Russia. Iran gives another 10 billion. The Turks buy the rest wherever they can. It was the presence of a serious gas shortage that served as the basis for agreeing to the implementation of the first line of the Turkish Stream, after the completion of which an additional 15.75 billion cubic meters of blue fuel per year will come from Russia.
But the Turks do not like that their gas dependence on Russia will reach 80%, which will put all further development of Turkish industry, which is always based primarily on energy, under Moscow’s control. And this is where things start to get interesting.
According to statements from the Turkish side, they do not expect to receive more than 6 billion cubic meters per year from Azerbaijan until at least the end of 2022-2023. Despite the fact that we would like at least 10, and preferably 11 billion. But they are not there, which means there is absolutely nothing to pump through Greece, Albania and the Adriatic, and all statements by the Italians about the environmental threat are simply political PR. However, it is still theoretically possible to find gas at TAP, but it will never appear at NABUCCO. Unless, of course, we consider the second branch of the Turkish Stream as a source, the construction of which Turkey also gave permission for. But these additional 15.75 billion cubic meters of “Russian gas” completely cancel the basis of the concept of the Southern Gas Corridor as an important alternative line for importing energy resources to the EU, bypassing the Russian Federation.
Realizing that, despite all the rejection of reality, there is no other alternative, a number of oil and gas TNCs are trying to “find” the missing gas on the other side of the Caspian Sea - in Turkmenistan. Formally, any project there is impossible until the final demarcation of the water area, the process of which is underway, but is still far from completion. In practice, Western lawyers think that they have found a “gap” that allows them to begin designing a joint Azerbaijani-Turkmen project to lay the Trans-Caspian gas pipeline. Georgia has secured the support of the European Commission and expressed its readiness to finance the start of project work.
Turkmenistan's interest in “joining” the SGC is simple. In 2016, Russia stopped purchasing Turkmen gas, and at the beginning of 2017, Turkmenistan quarreled with Iran, as a result of which it lost exports there. As a result, the country is capable of producing 75-80 billion cubic meters of gas per year, but sells only 29.6 billion to the only buyer - China, which takes advantage of Ashgabat's desperate situation and pays little - only $ 185 per thousand cubic meters. The drop in export earnings has hit the country's income hard and forced the Turkmen government to significantly cut social guarantees. The incoming money is only enough to service loans received from China.
The implementation of TAP will make it possible to direct the “available surplus” through the Southern Corridor “to the West.” They are preparing to go 12-15 billion on the first line, then another 15-16 billion on the second. The project is actively supported by EU banks and that part of the European elite that actively does not like the forced rapprochement of the European Union with Russia.
Theoretically, Turkmen gas can provide both the additional load of TANAP and the needs of the Trans-Adriatic part of the SGC. In the future, even oust Gazprom. And if you look very far and take into account the very, very long-term plans (today rather just dreams, although not without reasonable grounds) of Turkmenistan to double its production with Western help, Europe can really get through the Southern Corridor (taking into account its expansion) to about 90 billion cubic meters of gas, which is approximately 70-75% of Gazprom's current supplies to the EU. In theory.
Because in practice, for the next five years, 6 billion cubic meters is all that can pass through the SGC from Turkmenistan. Consequently, they will not reach the European border of Turkey at all. At the same time, in the next three to four years, Nord Stream 2 and South Stream 2 will be commissioned, which will increase Russian gas exports to Europe from 155.9 (data for 2017) to 226-227 billion . cubes per year.
Against this background, even if Azerbaijan manages to increase production to at least 18 billion, and Turkmenistan manages to miraculously extend the first line along the bottom of the Caspian Sea, then even in this case, at most 22-24 billion cubic meters will reach Europe, which will amount to at most 10% of Russian volumes. They will certainly bring additional money to suppliers, but they will not be able to have any serious impact on the overall balance of supply and demand in the European gas market, especially given the decline in European production. There is no alternative to the dominance of Russian gas in Europe.
El Murid is itching to write five posts a day about how bad Russia is. We have to repeat ourselves. There are not many events that can be interpreted as Putin’s fault.
That is the failure of some kind of “northern strategy” of Putin, although if Afrin is given to Putin, then even this strategy invented by El-Murid will end in victory. The fact that Putin did not achieve the non-partition of Syria, any of the Syrian participants of the United States, Turkey, Iran, says that Syria will remain united. These are some gas corridors that Putin did not achieve. But Gazprom has already built almost 900 km of the Turkish Stream gas pipeline in total along two lines. And here is a new feature, or rather a bearded one from the time of Nabucco. El-Murid threatens the Southern Gas Corridor.
Oddly enough, Turkmenistan is in the most difficult situation. Hundreds and thousands of Turkmens are fleeing to Afghanistan, driven to complete despair by the despotic regime in their country. In Turkmenistan, contradictions are growing between the leading five tribal associations, and the situation of the population is completely intolerable. The army is unreliable to the point that soldiers are simply not issued weapons. On the Afghan side, in the province of Jowzjan, there is a concentration of ISIS militants, and to a large extent - Turkmens. In the event of “Drang Nah Turkmenistan” from Afghanistan, predicting the outcome of the attack is more than problematic: the militants may be greeted, if not with flowers, then certainly with joy
But there you can think about who to sell the future 180 billion m³ of gas per year. Nothing personal, just business. Then Russia will have to save this fraternal people. Well, this hard work will have to be paid for with Turkmen gas, if at least something remains intact. Moreover, there will be neither Turks nor Americans there. Unless Iranian proxies will help. All their own, so to speak)).
By the way, ISIS is an excellent tool for annexing Northern Kazakhstan, and for Russia to seize oil fields in Kashagan and gas fields in Ilotan. And all this action is in our backyard, where no one can interfere. You can re-cut Central Asia into countries.
So, from the Central Asian countries Uzbekistan and Kazakhstan, they are exporting to China. Turkmenistan, if the war in Afghanistan continues, will go bankrupt. Not a single cubic meter will reach Europe. Azerbaijan's gas exports of 10 billion m³ are completely absorbed by Turkey and Iran. Moreover, he doesn’t even have enough to fulfill contracts on Iran. On November 22, 2017, Azerbaijan resumed purchases of natural gas from Russia.
Who will fill the $45 billion Southern Gas Corridor? That's right, Russia. Moreover, Russia does not need to build anything. Everything will be built by the EU
Following the third energy package of the European Union. Russia can fill at least half of the pipe))). There is no one else. Even if Iran exports through the SGC, it will only be able to fill half of the pipe under the third energy package. But it’s not just the United States that is against Iran, even the EU is against it, and despite allied interests, Russia is also against it.
No one can now fill the Southern Gas Corridor except Russia.
Moreover, apparently the EU is building this bypass route to Ukraine for Russian purposes. Russian diplomacy. With the southern gas corridor, even 2 additional Turkish flow pipes are not needed. The Southern Gas Corridor initially joins the Russian gas system. Relations with Georgia damaged on 08.08.08 have already been restored Russian diplomacy.
Well, if, as part of the continuation of TANAP, the Trans-Adriatic Gas Pipeline is built, with the expansion of the SGC, then and only then will 2 more Turkish Stream pipes be needed. Because there is nothing and no one to fill out the TAP except Russia. Azerbaijan will not have enough gas even with the completion of the first stage of the Southern Gas Corridor; it is already buying gas from Russia
This is why the Turkish Stream for Turkey means that it itself voluntarily gives up its interests to Russia in Central Asia, refocusing on it former republics Unions exporting their gas to Europe. Naturally, in light of even these two factors, the Turks view the Turkish Stream as an extremely annoying obstacle, although they are not averse to taking advantage of the bonus in the form of one of its pipes to their domestic market.
The most surprising thing is that none of the Vlasovites see that the European Union is building a network of gas pipelines with its own money in order to supply Russian gas there. There is no Turkish participation there. Harm to Russia can only be caused by Turkmenistan’s access to these pipes. But consistent Russian politics a reduction in gas exports from this country will most likely lead to a social explosion. Russia does not need another gas rival. Neither the United States nor Iran needs it. But there are no other players there. No one will allow the Trans-Caspian gas pipeline to be realized. Yes, and he is not needed. There is a gas pipeline around the Caspian Sea. It will be necessary to release the volumes if Turkmenistan is ours.
The formation of a Turkish-American military alliance in Syria creates good preconditions for the transportation of hydrocarbons through the occupied territories from the Arabian Peninsula to Turkey and further to Europe: “This makes the Turkish Stream gas pipeline almost unnecessary, in which the Russian Federation is interested and which has become one of the unspoken motives for the introduction Russian group in Syria"...
Again, twenty-five. The Vlasovites still can’t get the Qatari version of the gas pipeline through Syria out of their heads. At least look at the map. And they thought about how they would build a gas pipeline from the Arabian Peninsula to Turkey, bypassing the territories of Assad and Shiite Iraq. Through Shiite Iraq, Iran is blocking. Russia is blocking through Assad. At the same time, the Kurdish-American right bank of the Euphrates is blocking the Iranian version of the gas pipeline. In Dominoes, this is called a "fish". Where Russia wins.
Moreover, the essence of the gas pipeline, whether the Qatari version or the Iranian version, is not to stretch it through Turkey, so as not to become dependent on it. And through Syria to the ports Mediterranean Sea and liquefy it there. But all options are blocked.
It would be necessary to build a gas pipeline to Turkey, so Iran would run it across its territory, and Qatar would connect. He would not need any Syria. But geographic cretinism does not allow Vlasov’s dreamers to even think. The only one who is not afraid to depend on the Turks is the EU and Russia. They have gas flow alternatives.
During a recent visit to Baku, European Commission President Jose Manuel Barroso held talks with Azerbaijani President Ilham Aliyev. During the final press conference, Barroso said that the parties “touched the issue of accelerating and expanding the Southern Gas Corridor project and agreed that this issue will be our common priority in the coming years. I mean discussing additional opportunities related to the development of this project.”
According to Manuela Barroso , The European Union will do everything in its power for the successful development of the Southern Gas Corridor, since: “this is an important issue in the diversification of consumers and sources. At the same time, it is an integral part of the European Union energy security strategy presented by the European Commission to the Council.”
The topic of diversifying energy supplies to the EU countries received further development this week.
Thus, Vladimir Putin, during an official visit to Vienna, said that the construction of the South Stream gas pipeline should be considered a pan-European project, which “is not directed against anyone... This is a project that is being implemented in the interests of energy stability in Europe as a whole and in interests of partners. This is a project not against anyone, but for our interests,” Putin noted.
Austria’s involvement in the construction of South Stream coincided with the one taking place in Budapest international conference, timed to coincide with the end of Hungary’s 12-month presidency of the Visegrad Group. Here, Hungarian Prime Minister Viktor Orban, in particular, noted that an economic era is beginning in Europe, which requires new tools to achieve stability, create new jobs and cheaper energy.
In this regard, the President of the European Commission, Jose Manuel Barroso, noted: “The ongoing disputes between Russia and Ukraine over energy supplies have reminded us of the need to have an effective European strategy.”
“Corridor” – not against “Flow”?
Director of the Institute of Political Studies of the Academy of Public Administration under the President of the Republic of Azerbaijan, Doctor of Political Sciences Elman Nasirov pointed out that for Baku, the key to energy security is the diversification of gas supply routes, and for the European Union, the diversification of sources. “In this regard,” continues Nasirov, “Azerbaijan really needs such large sales markets, and the European Union needs Azerbaijani energy resources.”
The Voice of America interlocutor notes that since relations between Moscow and Brussels have become noticeably complicated in Lately, EU countries need alternative energy suppliers. In this case, we are talking, first of all, about the states of Central and Southern Europe, which were supposed to be included in the South Stream line.
In this regard, Elman Nasirov recalled that the Southern Gas Corridor project involves the construction of the TANAP-TAP gas pipeline system from the Azerbaijani Shah Deniz field through Georgia, Turkey, Greece and Albania to southern Italy by 2019. After the project is put into operation through the Southern Gas Corridor, up to 10 billion cubic meters of “blue fuel” per year will initially be delivered to purchasing countries. In the future, the volume of supplies is expected to double.
And this fully meets the economic interests of Azerbaijan. “I want to note that our relations with the European Union in this regard are not directed against the interests of other states,” the expert emphasizes. - We have very a good relationship with Russia, to which we allocate 2 billion cubic meters of gas annually.”
According to the director of the Baku Institute for Policy Studies, it is incorrect to say that the Southern Gas Corridor is directed against South Stream, since the Russian gas pipeline is scheduled to be put into operation earlier, and the volume of supplies to it is planned to be three times larger.
“We are not competitors in this regard with Russia,” insists Elman Nasirov, “and Europe simply needs new alternative sources (of fuel) in order not to eliminate dependence on Russian gas, but to reduce it.” At the same time, the Azerbaijani expert believes that in this issue there is no political component, but only normal economic competition.
"Corridor" - a threat to Gazprom?
Director General of the Energy Policy Institute Vladimir Milov , on the contrary, believes that the Southern Gas Corridor has always worried both the management of Gazprom and Russian authorities, who perceived this project as a competitor in the supply of fuel to a relatively small market. In addition, a significant increase in demand for gas in the countries of Southern Europe is not expected, which means that supplies from Azerbaijan could harm Russian interests, the expert believes.
“Today, the market in countries such as Hungary, Bulgaria, and the former Yugoslav republics is completely tied to Russia. And if alternative sources arise, Gazprom will perceive this as a direct danger,” he develops his thought. Milov, adding that Azerbaijani gas traditionally has competitive advantages. That is why representatives of the Russian energy sector have always spoken vehemently about the Nabucco project and tried to buy out a significant part of Azerbaijani gas.
At the same time, Milov doubts that gas from the Shah Deniz field alone will be enough to fill the pipes of the Southern Gas Corridor. To do this, the expert believes, it is necessary to connect other gas-producing countries in the Caspian region. If the Southern Gas Corridor operates at full capacity, the position of Russian representatives in political negotiations with the European Union will become more pliable, Vladimir Milov believes.
“A number of countries in the Central and South-Eastern European region are heavily dependent on Russian gas supplies, and because of this there is a powerful faction of pro-Russian voices within the European Union. If an alternative appears (gas sources - A.P.), then the need to fawn over Putin too much may disappear. And, of course, this may, among other things, affect the positions of the Russian leadership on foreign policy issues in negotiations with the European Union,” concludes CEO Energy Policy Institute.
Corridor and Potok have common problems
Associate Professor, Department of European Studies, St. Petersburg University state university Tatiana Romanova notes that she is not inclined to be too optimistic about South Stream. And there are several reasons for this.
“Firstly, there are some problems with supply volumes. Now the size has been announced at 16 billion cubic meters per year, of which 6 billion will go to Turkey, and about 10 billion, respectively, to the European Union,” notes Romanova. And he reminds that calculations were previously published, according to which the indicated volumes make this project unprofitable.
The profitability of the project can be increased by attracting Iranian gas. But, although sanctions are against Islamic Republic and have been weakened, they are still in effect, which means this option is not suitable.
The second problem, equally relevant for both South Stream and the Southern Gas Corridor, is the demand for “blue fuel” within the European Union.
“The fact is,” notes Tatyana Romanova, “that the expert group of Russia and the European Union has been analyzing the dynamics of demand and trying to predict it within the EU for several years. But the European Union currently prioritizes the decarbonization of its economy, that is, the actual abandonment of traditional energy sources.” Therefore, the expert believes, existing calculations allow us to count on high demand for gas supplies until 2030, and then the EU countries will not need either Russian or Azerbaijani gas in current volumes.
The third feature that Tatyana Romanova points out is the alignment of the legal regime of both projects under discussion with the legal regime of the Third Energy Package of the European Union.
We are talking about a package of reforms in the field of gas and electricity approved in 2009, aimed at liberalizing the market. The essence of the package is to separate the business of selling and transporting energy resources. According to the European Commission, this will help increase competition, which will allow new players to enter the energy market and reduce energy prices.
“As part of the energy dialogue between Russia and the EU, the possibilities of how the Third Energy Package will operate without causing damage to external gas pipelines are being considered. In the meantime, this problem has not been resolved, and Azerbaijan and all other participants in the Southern Gas Corridor will face the same problem,” the expert notes.
And one more problem that Tatyana Romanova draws attention to. While the Southern Gas Corridor reduces the EU's dependence on Russia, it potentially increases the EU's dependence on Turkey. “And this is also a rather difficult partner, with his own views and requirements for European Union, and this point also needs to be taken into account,” sums up Tatyana Romanova, Associate Professor of the Department of European Studies at St. Petersburg State University.