Why Europe still needs Azerbaijani gas?
Baku, Azerbaijan, Apr. 28
By Maksim Tsurkov - Trend:
It seems that in their desire to get rid of dependence on Russian gas, European analysts draw conclusions that do not quite match reality.
In particular, the media reported that gas reserves, found on the shelf of the Black Sea near the Romanian shore, may change the situation with the supply of energy to Europe. The media also said that the production of cheap gas from the Domino field could oust the position of Azerbaijan. However, it is unlikely to happen, and here is why.
Firstly, information about this field has come up more than once. For the first time, the discovery of large gas reserves was reported in February 2012 by the Austrian company OMV, which is engaged in its development together with Exxon. Already at that time, the reserves of 42-84 billion cubic meters of gas were reported, but the companies expressed doubts about the economic profitability of the project.
The second wave of reports appeared in July 2014. The same volumes were reported, but the transition to concrete actions still was not discussed. And now such statements are reported again.
The real situation lies in the fact that even when such messages appeared, the EU supported the Southern Gas Corridor project, initiated by Azerbaijan, which aims to diversify sources of gas supplies to Europe.
The project's implementation has already started, the process is going at a faster pace and EU verbally expresses all possible support to its implementation.
Second, Europe needs gas (preferably not Russian gas) and the gas pipeline infrastructure that it gets as a bonus. The more suppliers Brussels will have, the more secure it will feel. Moreover, at the stage of expansion of the Southern Gas Corridor, Europe can receive Turkmen, Iranian and even Iraqi gas. How could one refuse such an attractive opportunity?
The Romanian field is yet to be developed, needs infrastructure, and to attract investors. This will take some time and currently, Europe doesn't have the time to wait. The more sources of supply the EU will have, the more options it will get.
Third, the European countries and Azerbaijan are bound by the contractual obligations. Europe will start receiving gas in early 2020. At the first stage, Europe will get 10 billion cubic meters, with the possibility of increasing to 20 billion cubic meters. All these factors are spelled out in the contracts, and the EU, which is positioning itself as a reliable partner, will unlikely violate them.
As time is of the essence, it makes Azerbaijani gas more essential.
Edited by CN
Maksim Tsurkov is Trend Agency's staff journalist, follow him on Twitter: @MaksimTsurkov