Page 7 - FSUOGM Week 27 2019

FSUOGM COMMENTARY FSUOGM
the overall cost of the project by 40%. is is a great achievement of the Azeri and Turkish peo- ple,” Abdullayev said according to a press release from SOCAR.
Decades in the making
A primary goal of the Southern Gas Corridor is to reduce Europe’s dependence on gas imports from Russia, so parts of the continent would no longer be vulnerable to Moscow’s “energy diplo- macy”. is became more urgent with the “gas wars” of the mid 2000s, when Gazprom spo- radically turned o the taps, mainly to punish Ukraine. Russia’s annexation of Crimea in 2014 cemented the antagonistic relationship between Russia and Ukraine, and led to tit-for-tat sanc- tions imposed by Russia and western nations.
It was actually Turkmenistan, the desert Cen- tral Asian nation estimated to have the world’s fourth largest gas reserves, that was initially seen as the main supplier of the Southern Gas Corri- dor when the concept was rst sketched.
Since then, however, China has moved into Central Asia in a big way, building a huge net- work of pipelines spanning the region. Turk- menistan is also in talks with Russia’s Gazprom on a possible medium-term gas supply deal, while Ashgabat is pursuing the longer-range goal of building the Turkmenistan-Afghanistan-Pa- kistan-India (TAPI) pipeline. In the meantime, plans for a subsea pipeline across the Caspian Sea from Turkmenistan to Azerbaijan have been bogged down in the failure so far to share out in uence in the Caspian among the ve littoral states.
Instead, Azerbaijan is set to start exporting to Europe within the next year, once TAP is com- pleted. e gas will come from the second phase of the giant offshore Shah Deniz field being developed by an international consortium led by BP.
“The completion of TANAP serves as an important component of the southern gas corridor, which aims to transport energy sup- plies from Azerbaijan to Europe via Turkey,
circumventing Russia,” commented Stratfor analyst Eugene Chausovsky in a tweet.
Diversifying supplies
e Southern Gas Corridor is not the only pro- ject being pursued by European states keen to wean themselves o Russian gas. EU member Romania is developing its o shore oil and gas resources in the Black Sea, prompting invest- ments into pipeline infrastructure, including to neighbouring Moldova, which until the opening of the Iasi-Ungheni pipeline was wholly depend- ent on Russian gas.
Further north, Poland and Denmark made a nal decision in November 2018 to carry out the construction of Baltic Pipe, a key energy infra- structure project that is set to reduce Poland’s dependence on Russian gas imports.
Other countries in Central and Southeast Europe are building LNG infrastructure as they look to another alternative to increase their energy security. Bulgaria, for example, recently purchased its rst US LNG, and there is strong interest among Central European states such as Hungary in Croatia’s planned LNG terminal on the island of Krk.
Meanwhile, Russia is building its own pipe- line infrastructure to Europe, which remains heavily dependent on Russia gas. New pipelines such as Nord Stream 2 and the Turkish Stream (aka TurkStream) extension will allow Russia to serve European markets without transiting Ukraine.
Gazprom is rushing to complete the Nord Stream 2 pipeline that will run to Germany via the Baltic Sea before the start of 2020 prior to the expiry of the gas transit agreement with Ukraine, though it is unclear whether this deadline can be met. As of May 2019, Gazprom had already secured €6bn in nancing out of the previously estimated cost of €9.5bn, and received all permis- sions for construction besides that of Denmark, the territorial waters of, which the company said it was ready to bypass.
Russia is also investing into the Turkish
Week 27 09•July•2019 w w w . N E W S B A S E . c o m P7