South Stream project implementation not to affect Caspian gas supplies to Europe
Azerbaijan, Baku, Feb. 17 / Trend V. Zhavoronkova /
The implementation of Russian South Stream project will not affect the future Caspian gas supplies to Europe, European energy expert Neil Melvin believes.
Russian Gazprom's Management Committee chairman Alexey Miller approved the South Stream Construction Charter this week.
The South Stream project is implemented to diversify the routes of natural gas supplies to the European consumers and envisages the construction of a gas pipeline across the Black Sea to the South and Central Europe.
In December, 2011 Russia and Turkey reached an agreement on granting a final construction permit for the South Stream pipeline.
"My own view is that the South Stream project is primarily a project designed for pressure in terms of Russian negotiation position," European Energy Agency member and Stockholm International Peace Research Institute (SIPRI) expert Melvin told Trend over the telephone from Sweden. "First of all, it is designed for pressure on Ukraine to try to gain Gazprom's better access for the Ukrainian gas transit system and favorable gas contracts."
Secondly, it is something of a spoiler to the Nabucco project, he added.
Nabucco gas pipeline, which is one of the projects within the Southern Gas Corridor, is designed to transport gas from the Caspian region and Middle East to Europe. According to the overall conception of Nabucco project, the pipeline will be laid from the Georgian-Turkish and Iraqi-Turkish borders to the Austrian Baumgarten.
But, the expert believes that actually the South Stream will not affect future gas supplies from the Caspian region. In addition, the success of the project is rather doubtful.
"My own view is that the actual economic basis of the South Stream is rather weak. It is a very expensive pipeline," Melvin said.
He added that it is very unclear which sources will provide the South Stream pipeline with gas and it causes some doubts whether the Gazprom actually is capable of supplying the required volumes of gas to Europe.
"What we have seen during the last weeks, there have been interruptions in supplies because of apparently insufficient recourses of gas in Russia to meet the demand," Melvin said.
However, the expert believes that probably Nabucco is anyway going to suffer, not because of the South Stream, but because of the emerging new project supported by Azerbaijan - Trans Anatolian Pipeline (TANAP).
TANAP is a proposed Azerbaijan-Turkish project which envisages a construction of a pipeline from the eastern border of Turkey to the country's western border. Azerbaijan and Turkey signed a memorandum of understanding to establish the consortium that will build the gas pipeline. The cost of TANAP will be set by SOCAR and may be close to the figure of $5 billion.
"I think Nabucco is more likely to be challenged by TANAP project rather than the South Stream," Melvin said.
He believes that the concurrent implementation of Nabucco and TANAP will not be necessary.
"Looking at the situation today, Nabucco has a particular disadvantage and doesn't have any committed gas volumes to be filled with," Melvin said.
He believes TANAP has a much bigger advantage than Nabucco and a European pipeline from example from Austrian border to Turkey - "a shorter Nabucco" may be more realistic, than its long variant.