Two reasons for Moscow to resume South Stream project

Two reasons for Moscow to resume South Stream project

Baku, Azerbaijan, March 31

By Elena Kosolapova - Trend: Despite the fact that the European Union is ready to resume talks with Russia over the South Stream gas pipeline, the project should fully comply with the rules of the Third Energy Package, independent European Researcher Andreas Marazis believes.

Meanwhile Russia's unwillingness to meet its requirements was the reason why the project was abandoned in the first place. The EU legislation, and the Third Energy Package in particular, prohibits companies from both owning the gas and operating the pipeline.

"On one hand, the European Union could resume talks with Russia on South Stream as European demand for Russian gas would increase in the long-term, but on the other hand, the EU's legislation (Third Energy Package) shows that the EU will not abandon its free-market values in exchange for cheap natural gas. Third-party access and unbundling are now prerequisites for any new pipeline project, as well as for every new contract for existing infrastructure that is to be signed after the expiration of existing ones and this is a reality that Russia will have to comply with," Marazis told Trend.

Russia suspended the South Stream project, designed to supply Russian gas to Europe bypassing Ukraine, in December 2014. Russia said "the EU's non-constructive position" was the reason for the project's suspension.

Then it was decided to build the Turkish Stream through the territory of Turkey, instead of the South Stream. But the project came under threat in late 2015 due to sharp deterioration of relations between Moscow and Ankara when Turkey shot down a Russian Su-24 bomber with two pilots on board.

In March EU's Ambassador to Russia Vygaudas Usackas said the European Union is ready to resume talks with Russia over the South Stream pipeline to southern Europe. Later some countries of the South-Eastern Europe expressed their interest for this project.

Marazis believes that discussions concerning the revival of South Stream, as it was initially planned, are high unlikely. Russia seems to be in favor of similar projects in Southeastern Europe, like Greece-Italy Transit Route, he said.

The analyst noted that there are two main reasons why Moscow might resume the project.

"One of them is the sharp deterioration of relations between Russia and Turkey following the downing of a Russian plane on November 24, 2015. The second reason is the recession in the Chinese economy, which has stalled the "Power of Siberia" project," he said.

Marazis said that Europe has been a key energy export market for Russia since the 1970s and this will be the case for the coming years as well. This has led to an increasing infrastructural inter-dependence, according to the expert.

The analyst believes that countries such as Greece and Italy that in February signed a memorandum of understanding to develop a pipeline route from Greece to Italy for Russian gas, will benefit from this deal. Bulgaria, which imports almost 80% of its natural gas from Russia will also benefit as well once it is connected.

Meanwhile he noted that the South Stream, Turkish Stream, and the "updated version" of South Stream, are all politically oriented projects specifically designed to avoid and isolate Ukraine.

"Right now the most attractive gas supply project is by far the Southern Gas Corridor which is expected to deliver 10 billion cubic meters to the European markets by 2020," Marazis said.

Today the Southern Gas Corridor is among the European Commission's priority energy projects, which aims at the diversification of the EU gas supply sources and routes. The project envisages transportation of 10 billion cubic meters of Azerbaijani gas from the Caspian Sea to Europe 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. 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.

Marazis also said that in the list of so called "Project of Common Interests" regarding future energy infrastructure projects there is also the Eastring project, although it is in early negotiation phase.

Eastring will transport natural gas from different areas and alternative sources - in its first stage it will provide the Balkans and/or even Turkey with gas from the European gas market. In its final stage, when its bi-directional mode should be in place, Eastring will transit prospective Romanian Black Sea natural gas, Caspian and Middle East natural gas to Europe.

Edited by SI

Follow the author on Twitter:@E_Kosolapova

Armenia violates ceasefire with Azerbaijan 29 times
Armenia violates ceasefire with Azerbaijan 29 times
Croatian media features Armenians' hate crimes against Azerbaijanis
Croatian media features Armenians' hate crimes against Azerbaijanis
Hoagland comments on distortion of his remarks by VOA Armenian Service on Karabakh conflict
Hoagland comments on distortion of his remarks by VOA Armenian Service on Karabakh conflict
Loading Bars
Latest
Georgian ministry reveals volume of exported potatoes
Benzol transshipment via Turkey's ports during 1H2020 disclosed
National Bank of Georgia reveals volume of net profit received by banking sector
Germany, UK to persuade US to temporary lift sanctions against Iran
Cargo transshipment via Turkey's Iskenderun port for six months revealed
Georgian Health Ministry purchases rapid COVID-19 tests
Georgian Tskali Margebeli reveals volume of mineral water to be exported to Japan
AzEduNet seeking to attract investments for transferring schools to optic connection
Georgian olive oil replaces over 20% of imports
Iranian fisheries company interested in exporting their products to Turkmenistan
Russia's Ministry of Agriculture: Russia expands range of exports to Uzbekistan
Switzerland finances digital learning project of Uzbekistan
National Bank of Pakistan cease to operate in Uzbekistan
Iranian Energy Exchange announces products for sale on August 12
Thermal power plant to be commissioned in Iran's Shiraz industrial park
Bentonite transshipment via Turkey's ports in 1H2020 unveiled
Turkey reveals cargo shipment from Ukraine via its ports in 1H2020
Volume of wheat purchased in Iran's Kurdistan Province revealed
Coronavirus patients covered by supplementary insurance in Iran
Ukrtransnafta reveals volume of Azerbaijani oil transportation
Iran discloses number of stations being built in Iran's Shiraz county
Vienna University of Technology has announced admission for the first Master's program in Baku
Price for cars may decline in Iran
General Motors' Dhivya Suryadevara steps down as CFO
Kazakhstan increases oil export, petroleum goods production
Volume of wheat purchased in Iran announced
Return of blocked deposits in closed banks in Azerbaijan to begin in few days
Azerbaijan's Constitutional Court decides in favor of citizens on deposits in closed banks
Sale of Iran's oil bonds to bring profit to buyers
Afghanistan’s activity at Turkmen State Commodity Exchange in July 2020
Кazakhstan Electricity Grid Operating Company to buy construction materials via tender
Demand of Azerbaijani banks at Central Bank's currency auction fully met
Iran to review possible withdrawal from nuclear deal before US elections
Kazakhstan’s freight transportation operator opens tender for equipment maintenance
Iran's oil bonds not profitable during foreign currency crisis
Iran uses domestic nanotechnology to paint coating of airplanes
Insurance sector’s premiums up in Georgia
New inflow of natural gas received at Turkmenistan's Tajibay field
Uzbekistan aims to boost production of cement, construction materials
Iranian economist: Selling oil bonds - win-win deal
Turkish president receives Azerbaijani Foreign, Defense Ministers
Azerbaijan confirms 214 more COVID-19 recoveries
Uzbekistan establishes joint Uzbek-German asphalt production enterprise
Turkmenistan exports large volume of vegetables, fruits to EAEU countries
Iran's Shazand Oil Refining Company reveals amount of fuel produced for ships
Kazakhstan's foreign exchange reserves up month-on-month
Georgian Products Renaissance company expands export of its products
Saudi arabian company to build gas turbine power station in Uzbekistan
Prices of precious metals change in Azerbaijan
Turkmenistan increases tomato exports to EAEU
Georgian citizens arriving in Finland not to undergo compulsory quarantine
Uzbek-Korean JV to buy industrial vacuum cleaners via tender
Kazakhstan's import of Austrian-made goods plummets during COVID-19
Turkey unveils 1H2020 volume of gasoil movement through its ports
Mevlut Cavusoglu: Turkey always next to fraternal Azerbaijan
Azerbaijan's PM holds phone talk with CEO of BP Group
Iran’s Bahar Azadi gold coin price continues to rise
Iran talks about details of dairy products export
Volume of gas injected into storages in Azerbaijan disclosed
Turkish Anadolu news agency publishes interview with Azerbaijani MP Sevil Mikayilova on Azerbaijani-Turkish relations
Russia is first to register COVID-19 vaccine worldwide
French privacy watchdog opens preliminary investigation into TikTok
Azerbaijani currency rates for August 11
Demand for coal in Uzbekistan increases
Georgian Partnership Fund to sell its shares in Telasi energy distributor company
Design of upper block for Azerbaijan's Karabakh field being developed
Home purchases in Israel at 10-year peak in June
Iran's Tehran Oil Refining Company to boost its production
South Korean company to build cement plant in Uzbekistan
Azerbaijani FM: Azerbaijani-Turkish relations successfully developing in all areas
Azerbaijani president: Interest of foreign investors in oil and gas industry, in Azerbaijan’s oil and gas potential showing no sign of abating
Azerbaijani president: Just as we are returning to once abandoned Garabagh field today, we will return to our native Karabakh land in same manner
Iran to save foreign currency via domestic production
Turkmenistan’s Balkan region to increase volume of agricultural production
Amount of MOL Group’s provisions at Azeri-Chirag-Gunashli disclosed
Uzbekistan, Russia expanding bilateral cooperation in agro-industrial sector
Jackets for Azerbaijani Absheron field ready - BOS Shelf
Azerbaijani president: Garabagh field jacket demonstrates our strength again
FM: 29 agreements to be signed between Azerbaijan, Turkey
President Ilham Aliyev: First gas and oil at Garabagh field should be produced in two years – at the end of 2022
Azerbaijani FM to meet with Turkish president
Bos Shelf: Sail away of jacket for Azerbaijani ACE project expected in late 2021
President Ilham Aliyev: All projects are being implemented successfully
President Ilham Aliyev: By doing all this work, we are redrawing an energy map of Eurasia
Azerbaijani president: Southern Gas Corridor is our historic achievement
Iran exports major part of non-oil products to neighboring countries
Azerbaijani president: Then leadership of Azerbaijan – the PFPA-Musavat tandem – allowed for occupation of our lands
Georgian Healthcare Group removed from London Stock Exchange
Iran building new solar panel station
Iran reports its COVID-19 data for August 11
MOL Group reveals capex in Azeri-Chirag-Gunashli
Uzbekistan discovers new gas field in country's Bukhara region
MOL Group increases filling stations in Europe
European Gymnastics President: 38th edition of FIG Congress to be held in Antalya
Azerbaijani oil grows in price
BOS Shelf completes construction of largest offshore jacket in Caspian Sea
New wells put into operation at Iran's South Pars gas field
Azerbaijani, Turkish FMs holding meeting in Ankara (PHOTO)
Central Bank of Azerbaijan launches IFC-funded digital financial service project
Georgia's Herbia company plans to expand its operations
All news