Turkish Stream, Southern Gas Corridor not rivals

Oil&Gas Materials 27 May 2015 18:59 (UTC +04:00)

Baku, Azerbaijan, May 27

By Elena Kosolapova - Trend:

Turkish Stream and South Gas Corridor have different purposes and will not fiercely compete with each other, Alexei Gromov, the head of the energy department of the Institute of Energy and Finance of Russia, said.

"Russia intends to redirect the gas supplies from the Ukrainian direction to other direction due to the implementation of the Turkish Stream project, rather than to expand its presence on the European market," he told Trend. "I do not see any fierce competition between these projects, in any case, within the mentioned projects."

"The Southern Gas Corridor will not force out Russian gas from European countries, but will allow them to diversify their sources of gas supply," he said.

"The diversification of sources of natural gas supply is good for Europe," he said. "This is a general line of developing the power engineering and gas industry in the world."

In the short term, Europe will have to increase import of natural gas, because despite some reduction in natural gas consumption in recent years, the production of Europe's own gas falls even more rapidly, according to Gromov.

"We have no illusions that Europe will take additional volumes of gas from Russia, given the political situation that is emerging around Ukraine and relations between Russia and the EU," he said.
Europe will take these additional amounts to cover its own declining production from other sources, including Azerbaijan, and in the future possibly Iran and Turkmenistan, according to the expert.

Gromov said that the construction of the Turkish Stream is planned to be carried out in several stages.

"The project involves the construction of four branches of the gas pipeline with a capacity of 15-16 billion cubic meters each," he said. "No one prohibits us to realize it partially."

Gromov went on to explain that depending on market conjectures there can be laid not four, but, one or two pipes.

"And in this case, we'll achieve the goals that we want to, i.e., we'll get towards another direction away from the transit of Russia's gas through Ukraine's territory," he said.

Gromov also said the decision regarding the further implementation of the project will depend on the conjectures of the European gas market in the short term.

The expert also said that in terms of EU laws, there are no obstacles to construct the Turkish Stream and transfer the gas transportation from the Ukrainian direction to the Turkish direction, and it doesn't contradict the requirements of the EU's Third Energy Package.

Gromov added that Gazprom also doesn't intend to violate the terms of long-term contracts for the supply of Russia's gas to the European countries.

If Gazprom proposes another option for gas supply to the destination by maintaining the volume, there will be no violation by the Russian side, said the expert.

At the same time, Gromov said that a question arises: how the gas will be delivered to these European countries from its entry point to the European gas transportation system on the border with Turkey.

The expert said that in order to ensure such supplies, the interested countries should now agree on the construction of gas transportation systems adapted to the new Turkish Stream on their territory.

"It doesn't contradict with the requirements of the Third Energy Package," said the expert. "This is the issue of bilateral agreements of Gazprom and the countries which have signed contracts for supply of Russian gas through Ukraine."

The question is weather solutions on this issue will be achieved or not, he added.

The Southern Gas Corridor is one of the priority energy projects for EU. It envisages the transportation of gas from the Caspian Sea region to the European countries through Georgia and Turkey.

At the initial stage, the gas to be produced as part of the Stage 2 of development of Azerbaijan's Shah Deniz field is considered as the main source for the Southern Gas Corridor projects. Other sources can also connect to this project at a later stage.

As part of the Stage 2 of the Shah Deniz development, the gas will be exported to Turkey and European markets by expanding the South Caucasus Pipeline and the construction of Trans-Anatolian Natural Gas Pipeline and Trans-Adriatic Pipeline.

Edited by CN


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