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Azerbaijan plays important role as first supplier of Caspian gas to EU (VIDEO)

Oil&Gas Materials 5 March 2015 12:58 (UTC +04:00)
Azerbaijan plays an important role as the first supplier of the Caspian gas to the EU market
Azerbaijan plays important role as first supplier of Caspian gas to EU (VIDEO)

Baku, Azerbaijan, March 5

By Aygun Badalova - Trend:

Azerbaijan plays an important role as the first supplier of the Caspian gas to the EU market, analyst at "Eurasia Energy Observer" Andrej Tibold told Trend on 'This week in focus' episode. "The Southern Gas Corridor has become a priority project in the European Union," he said. "There are several reasons for that."

"From the beginning the Southern Gas Corridor has been an alternative source of supply," Tibold said. The diversification has been the main stake here."

Tibold said that another benefit of this project is that alternative sources of supply are good for liquidity on the gas market.

"The markets targeted by the Southern Gas Corridor are mainly located in the South-East Europe, which are not really liquid," Tibold said. "More liquidity, more diversity - that is what the Southern Gas Corridor can bring to the European market."

He said that the increased tensions between the EU and Russia over the crisis in Ukraine, has made it even more necessary to not only look for alternative gas supply sources for Europe, but also to develop renewable energy sources and increase energy efficiency.

The Southern Gas Corridor is one of the priority energy projects for the EU. The project is aimed at diversification of routes and sources of energy supply and thereby increase EU's energy security. It envisages the delivery of gas from Azerbaijan's Shah Deniz gas and condensate field to Europe.

The gas to be produced as part of the second stage of the field's development will be exported to Turkey and European markets through the expansion of the South Caucasus Pipeline and the construction of Trans Anatolian Natural Gas Pipeline (TANAP) and the Trans Adriatic Pipeline (TAP).

While talking about the new Turkish Stream project initiated by Russia instead of the failed South Stream, Tibold said that the new project is not much different from the previous one.

The volumes of the Russian gas supplies are still the same," he said. "The location where gas enters Europe has not changed much."

Tibold said that Russia will not accept failure with Turkish Stream, since it has already invested a lot in creating its own infrastructure for the South Stream.

In particular, he said Russia has already invested in creating its own "South Corridor" on its territory for gas supply to compressor station Russkaya.

During the talks in Turkey on December 1, 2014, Russian President Vladimir Putin talked about ceasing the South Stream gas pipeline from Russia to Bulgaria. A new Turkish Stream project was immediately initiated.

In December 2014, Russian company Gazprom and Turkish company Botas signed a memorandum of understanding to construct a gas pipeline across the Black Sea to Turkey. The pipeline's transportation capacity is projected to stand at 63 billion cubic meters of gas per year.

Of these, some 14 billion cubic meters of gas is intended for delivery to Turkey and the remaining volumes, about 50 billion cubic meters of gas, will be delivered to the border of Turkey with Greece.

The gas pipeline is projected to run on 660-kilometer section of the route, on which it was planned to build the South Stream, and on 250-kilometer section in a new corridor towards the European part of Turkey.

It is also planned that the first line of the pipeline, with a pumping capacity of 15.75 billion cubic meters of gas per year, will be stretched to Turkey in December 2016.

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Follow the author on Twitter: @AygunBadalova

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