Azerbaijan in lead of gas race to Europe

Oil&Gas Materials 2 December 2014 20:02 (UTC +04:00)
Azerbaijan and Russia have reached a new round of rivalry for the market of Southeast Europe.
Azerbaijan in lead of gas race to Europe

Baku, Azerbaijan, Dec.2

By Aynur Gasimova - Trend:

Azerbaijan and Russia have reached a new round of rivalry for the market of Southeast Europe. The impetus for this rivalry became Moscow's halting of the South Stream pipeline.

If Azerbaijan has already provided supply route and starts to create together with partners an infrastructure, which includes TANAP and TAP pipelines as well, then Russia is still ahead of this whole process, considering Europe's agreement. Europe by the way was the one that basically "killed" the South Stream.

Even if Russia gets access to the TAP pipeline, it will be able to provide only one fifth of the gas (of about 50 billion cubic meters per year), which this country intends to supply on the border of Turkey and Greece.

Thus, Russian gas can actually rely only on the Greek market for now. However, the market of this country is very small. In 2013, the volumes of gas consumption in Greece totaled only 3.6 billion cubic meters.

Azerbaijani and Russian interests have already once clashed on Greek market. The national companies of both countries - SOCAR and Gazprom - were competing for the right to purchase Greek DESFA gas transmission system operator. And the Azerbaijani company became the winner of this competition.

However, today the European Commission somewhat protracts the procedure of endorsement of this deal. It is up to the European Union to decide whether it is beneficial for it to protract this process.

But still Russia tries to get close to the European market and it is time for Brussels to show a more decisive position, especially on the issue related to the decision on DESFA.

South and East Europe is one of the most interesting directions for the blue fuel suppliers. This market is attractive for producers because of the large number of countries and relatively small volume of consumption (and sometimes for the lack of infrastructure as well).

Today, Greece can be the last obstacle to Russia's gas expansion to the south of Europe. Currently, the interests of producers from various regions are clashing in South Europe. It should be taken into consideration that Israel also plans to supply gas in this direction.

However, in spite of everything, "Southern Gas Corridor" initiated by Azerbaijan and its partners is the most real project. This is because the projects that are included in the "Southern Gas Corridor" project have already been approved, passed all formal procedures and the difficult process of obtaining environmental impact statements and currently are under implementation.

In principle, by gaining access to the European market, Azerbaijan and its partners can be engaged in distribution of gas of the third parties.

Aynur Gasimova is the head of the Trend English News Service

For any questions or feedback, follow the author on Twitter @AynuraGM