Azerbaijan, Baku, Feb. 21 / Trend E. Ostapenko /
The French energy company Électricité de France's (EDF) participation in the South Stream project improves the demand side of the project. But the issue of supply remains a real concern, Borut Grgic, a European expert on energy issues, said.
He said that the serious problem is who will supply gas to the South Stream pipeline.
"Russian capacity is maxed out and the Caspian states are looking for diversity," Founder of TransCaspian Intiative Borut Grgic told Trend.
Last week Gazprom head Alexei Miller told about the fact that EDF will enter the construction project of the South Stream gas pipeline by late 2011. Russia's Gazprom and Italy's Eni are implementing the project.
The South Stream project is being implemented to diversify the supply routes of natural gas to European consumers. It involves the construction of a gas pipeline through the Black Sea to the South and Central Europe. Presumably, the capacity of the project will be accelerated gradually. The total design capacity of the offshore section of South Stream will reach 63 billion cubic meters a year. According to the estimations, the project is worth 25 billion euro.
"The South Stream seems very political in nature. Economics of the pipeline may not line up," he said.
He said that EU energy companies are in large part driven by commercial interests, so, the EU energy actors are lining up on opposite sides, each trying to maximize its own gains. But the political and security rationale behind opening EU's southern corridor is still there, he said.
The Southern Corridor is a priority EU energy project, diversifying energy supply routes and sources and increasing EU energy security. The Southern Corridor includes the Nabucco gas pipeline, Trans Adriatic Pipeline, White Stream, and ITGI.
"Promoting one pipeline over another at the EU political level is a mistake, though it is also important to realize that another Russian-driven pipeline project while increasing the total gas volume for the EU may not help much in lifting EU's energy security," he said.