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, this is an integral part of the strategy presented by the European Commission to the Council energy security European Union".
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) so as 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 its own views and demands on the 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.
The abundance of gas pipeline projects in Central Asia and the Caucasus today can become 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." 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.
Turkey is gradually turning into a gas hub: less than a month after the completion of the first line of the Turkish Stream for Russian gas, the first stage of another gas transport route, the Southern Gas Corridor (SGC), was launched. Azerbaijani gas will flow along it towards Turkey and then the EU.
The SGC itself will be an extensive network of gas pipelines, consisting of the expanded South Caucasus Gas Pipeline (Baku - Tbilisi - Erzurum), the Turkish TANAP (Trans Anatolian Gas Pipeline) pipeline and the European TAP (Trans Adriatic Gas Pipeline). The total length of all parts of the SGC will be 3,500 km from Baku to southern Italy through Georgia, Turkey, Greece, and Albania.
Gas from the Shah Deniz offshore field will be transported to Europe along this route. The cost of the project is estimated at more than $40 billion. It is assumed that at the first stage, the volume of Azerbaijani gas supplies via the new route will amount to 16 billion cubic meters per year, of which 10 billion cubic meters. m will fall in Europe, and will subsequently grow to 31 billion cubic meters.
Shah Deniz is one of the world's largest gas fields with gas reserves of more than 1 trillion cubic meters. The first stage of the project has already been launched; last year exports amounted to 7.3 billion cubic meters. In the coming days, it is planned to complete preparations for the start of production as part of the second stage. The operator of the project is the British BP (it owns 28.8%). Other participants are Petronas (15.5%), SOCAR (16.7%), TPAO (19%), NICO (10%) and Russian (10%). The cost of the second stage is almost $24 billion, and the estimated production volume is 16 billion cubic meters per year.
President of Azerbaijan Ilham, who was present at the launch site at the Sangachal terminal near Baku, noted that seven countries are now participating in the project - Azerbaijan, Georgia, Turkey, Greece, Bulgaria, Albania and Italy, and Bosnia and Herzegovina, Croatia and Montenegro are also planning to join it . During the ceremony, Aliyev fired the first gas. It will go to the Turkish TANAP (Trans Anatolian Natural Gas Pipeline) pipeline and then to the European TAP (Trans Adriatic Pipeline).
“Azerbaijani gas is a new source of gas supplies to Europe, and with the implementation of the SGC we are re-drawing the energy map of the continent,” Aliyev emphasized.
It is worth emphasizing that other parts of the SGC are not ready yet. TANAP is scheduled to be put into operation on June 12, the Turkish Minister of Energy and Natural Resources previously reported. And the Trans-Adriatic Pipe should be completed only by 2020.
The project was initially intended to increase the security of gas supplies to Europe, compete with the Russian pipeline projects “Turkish Project” and “Nord Stream 2” and reduce Gazprom’s share in the European market.
Experts believe that formally this project may increase competition in the European gas market, but it will not seriously displace Gazprom’s position in this area.
If we assume that competition implies a certain flexibility for the buyer and the ability to choose between suppliers, then such competition does not appear here or it is minimal, notes an analyst at the Energy Center of the Skolkovo Business School.
Gas from the Shah Deniz 2 project will be supplied under long-term contracts; it is known that the price also includes an oil-related component, that is we're talking about about mandatory (within the scope of “take-or-pay”) purchases, the expert explains. Thus, it may not be so much about competition in literally This word is about diversifying the source of supplies for the countries of Southern Europe (Greece, Bulgaria, Italy), he adds.
16 billion cubic meters is less than 3% of the European gas market, including Turkey, or 12 times less than Gazprom’s sales to Europe, the group’s director for natural resources and commodities Dmitry.
This is a much more significant event for Italy, as well as Turkey and Bulgaria, which are heavily dependent on Russian gas - the project offers at least some kind of alternative, the analyst argues. It is no less significant for Azerbaijan, where until recently the main only product of raw material export was oil: most likely, the role of gas in the global energy balance will grow, so exporting gas is a good way to protect yourself a little from a possible drop in oil demand, which is possible over a long time horizon, adds Marinchenko.
Demand for Gazprom's gas may indeed decrease slightly, but Gazprom will still be able to manage volumes by offering discounts to buyers and making other concessions.
The fact that Gazprom welcomed the latest decision, which obliges the company to essentially abandon the practice of market segmentation and price discrimination, suggests that the holding is willing to show some flexibility to protect its market share, he adds.
Last week, Gazprom and the Turkish government signed a protocol on the construction of the onshore section of the second line of the Turkish Stream.
In addition to it, an agreement was signed between Gazprom and the Turkish Botas, which defined the main conditions and parameters for the construction of this section of the pipe. It is assumed that the second line of the Turkish Stream (15.5 billion cubic meters per year) will ensure the transit of Russian gas through the Black Sea to the coast of Turkey and further to the border with.
On the same day, May 26, the head of Turkey announced that Turkish Botas had obtained from Gazprom a 10.25% discount on gas supplied in 2015-2016. and will receive a $1 billion retroactive payment as compensation.
The first part of the Southern Gas Corridor project was opened in Baku, through which Azerbaijan will be able to directly export gas to Europe. President of Azerbaijan Ilham Aliyev took part in the ceremony. By turning the key, he symbolically launched the supply of “blue fuel” from the Shah Deniz field on the Caspian Sea shelf to Europe.
Azerbaijani diplomacy of the 21st century: the secret of success in the international arena
The Southern Gas Corridor consists of three puzzles. The first stage is the South Caucasus Pipeline (SCP). This gas pipeline connecting Azerbaijan with the Turkish city of Erzurum through Georgian territory was built back in 2007. But after the European Commission signed the declaration on the “Southern Gas Corridor” in 2011, a decision was made to expand the SCP. The pipeline runs parallel to the Baku-Tbilisi-Ceyhan oil pipeline, through which Azerbaijan exports oil to the EU through the Mediterranean port of Turkey.
Google Map Data, 2018
The second phase of the project is associated with the Trans-Anatolian Natural Gas Pipeline (TANAP), starting at the Turkish-Georgian border and crossing the entire Asia Minor. At the Greek border, TANAP will be connected to the Trans Adriatic Pipeline (TAP), which runs through Greece, Albania and Italy.
President of Azerbaijan Ilham Aliyev. Photo: www.globallookpress.com
The first supplies of Azerbaijani gas to Turkey are scheduled for 2018. In mid-May, Turkish Energy Minister Berat Albayrak announced the opening date of TANAP. This will happen on June 12. The gas pipeline from Greece to Italy, to which Bulgaria intends to join via interconnectors, will be put into operation around 2020. TAP will provide about 17% of Italy's gas consumption.
The capacity of the Southern Gas Corridor is estimated at 16 billion cubic meters per year, six of which will go to the needs of Turkey, and the remaining 10 will be supplied to Europe.
New gas war between Russia and Ukraine: Gazprom does not intend to be a sponsor of the Kyiv regime
Will Azerbaijani gas compete with Russian exports? The capacity of the Turkish Stream, when its second line is built, will be twice that of the Southern Gas Corridor. And taking into account the almost 200 billion cubic meters that Russia annually exports to the Old World, 16 billion from Shah Deniz is unlikely to “make a difference” in the European market, where the demand for gas is growing from year to year. We must also keep in mind the ongoing construction of the Russian Nord Stream 2, which will carry no less than 55 billion cubic meters per year.
It is worth noting that the Southern Gas Corridor is the fourth project aimed at increasing the energy transport independence of the South Caucasus republics from Russia. In 1999, the construction of the Baku-Supsa oil pipeline to Georgia was completed. Seven years later, the aforementioned Baku-Tbilisi-Ceyhan oil pipeline was built. At the same time, the Baku-Tbilisi-Erzurum gas pipeline was being implemented. The territory of three countries - Azerbaijan, Georgia and Turkey - passes through and was put into operation in the fall of 2017. Railway"Baku - Tbilisi - Kars."
The Southern Gas Corridor, as comparative statistics show, is not a direct competitor of Gazprom in the European gas market. Moreover, Russia itself is diversifying gas supplies at the expense of China.
Photo: Merkushev Vasiliy / Shutterstock.com
At the recent St. Petersburg International Economic Forum, Japanese Prime Minister Shinzo Abe also announced his interest in “blue fuel” from Russia. A little earlier, Bulgarian President Rumen Radev hinted at the possible reincarnation of South Stream.
At the same time, to assert that the Southern Gas Corridor is not a project bypassing Russia would be strange, at least from a geographical point of view. Without pretending to compete, Azerbaijan is strengthening its status as an independent international player, without being tied to either Russia or the West. The EU and the USA, as well as Western companies led by BP (participating in almost all oil and gas projects in Azerbaijan) are interested in expanding their influence in the South Caucasus, and in the future weakening the role of Gazprom in Europe. But Azerbaijan’s deposits alone are not enough for this. Gas pipelines bypassing Russia have real power only if Iran and Turkmenistan, the 2nd and 4th countries in the world in terms of “blue fuel” reserves, are connected to them. But there are a number of obstacles on this path: the unresolved status of the Caspian Sea, which is preventing the construction of the Trans-Caspian gas pipeline, and the Kurdish factor, which complicates the supply of Iranian gas. The United States is also making its contribution by delaying the development of one of the ten largest gas fields in the world, South Pars, by withdrawing from the nuclear deal.
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 that the project does not pose a threat to Russian gas exports.
“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 US, UK and European Union in 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 Energy Security Fund - 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