Will Europe receive Azerbaijani gas in the promised volume?

Will Europe receive Azerbaijani gas in the promised volume?

In the EU, despite huge investments in the project, there is no confidence that European consumers will receive 10 billion cubic meters of Azerbaijani gas per year through the “Southern gas corridor”. This statement is made by the Ukrainian website Terminal.

According to website experts, there is a growing understanding in the West that the resources of Shah Deniz are not enough to fully supply the Southern Gas Corridor, which can recoup costs. Supplies are required from other energy sources, and Turkmenistan has enough gas reserves. But, to supply the required volume of gas to Europe, the Trans-Caspian pipeline is needed, and this issue was brought up by Peter Burian, Representative of the European Union in Central Asia, during the first Caspian Economic Forum, held in Avaza a few days ago. Burian announced the new EU strategy, which considers the possibility of purchasing Turkmen gas.

In accordance with this strategy, the EU intends to gain access to gas resources located on the eastern side, the Russian Agency Prime reports. According to Burianin 2019, the EU “intensified discussions with Turkmenistan on energy cooperation, including the construction of the Trans-Caspian pipeline.”

Please note that the idea was proposed by the EU representative in Central Asia, not by Turkmenistan.

Ashgabat has long taken a time out in promoting the Trans-Caspian gas pipeline construction project postponing it until better times. But Europeans voiced this topic at the mentioned economic forum. At the same time, many European, Russian and even Azerbaijani experts recognized a few years ago that Azerbaijani gas is likely not enough to fill the Southern Gas Corridor, and other sources, most likely Turkmen, would need to be connected. But the closer the start of gas supplies through the SGC to Europe, the greater the belief in miracle that Azerbaijan might fill the Southern Corridor with its own gas only, and all other sources will be redundant, or worse, competitors.

In this regard, we refer to the impartial, as it seems to us, website Terminal. According to it Azerbaijan under long-term contracts should supply gas to Georgia and Turkey. Last year, supplies amounted to 2.68 billion cubic meters and 7.5 billion cubic meters, respectively. Domestic consumption in the country is estimated at 10-11 billion cubic meters. Main gas consumers in the country are generating companies and households. To meet domestic needs and fulfill obligations to other countries, Baku imports Iranian gas to supply the Nakhichevan region, separated from the main part of Azerbaijan by the territory of Armenia.

Baku was also forced to purchase Turkmen gas, that was necessary to fulfill obligations to Georgia and ensure domestic consumption during high demand. Gas was supplied in transit through Iran.

Until the end of last year, Gazprom also supplied gas to Azerbaijan. Russian gas was processed domestically and also used to maintain stable exports in winter.
Volume of supplies through TANAP should be 16 billion cubic meters – 6 billion for Turkey and 10 billion EU countries. Export of Azerbaijani gas through the Southern Gas Corridor to Europe should begin next year, but the volume of supplies s will be much less.

This is a picture drawn by the “Terminal”. That is why, the EU, Peter Burian spoke about Turkmen gas, Trans-Caspian gas pipeline, etc. It is noteworthy that although the statement of the EU representative in Central Asia does not fundamentally change anything in this situation, Iran and Russia spoke out against the Trans-Caspian gas pipeline at the Avaza Economic Forum – Iran strongly and categorically, Russia was quite restrained. There is nothing new here, Moscow and Tehran have always opposed the laying of a gas pipeline along the bottom of the Caspian between Turkmenistan and Azerbaijan. Just before, the Russian side declared its disagreement with this project, and Iran kept silent. Now it looks like a change of roles. The main argument against the construction of the Trans-Caspian gas pipeline is a “concern” for the fragile ecology of ancient Khazar. The argument is not new, and works perfectly.

And, nobody cares who and how the environmental impact assessment of the project will be conducted. It is assumed that the Trans-Caspian gas pipeline is a threat to the ecology of the Caspian Sea. Here you can understand Moscow and Tehran’s position. Russia protects its privileged position as a supplier of pipeline gas to Europe. Probably any other country would have acted similarly in this situation.

The situation with Iran is also more or less clear. The country’s economic capabilities are decreasing due to US sanctions. In this situation, the desire to allow energy flows to Europe through its territory is quite understandable.

At the same time, this also suggests that Moscow does not consider the Southern Gas Corridor to be a competitor if only Azerbaijani gas is supplied through it. SGC will be a serious competitor only if Turkmenistan gets access to this pipe.

What does this mean? The answer to this question is given by the same website – Terminal. In particular, it says if Azerbaijan’s gas is not enough to fill the Southern Gas Corridor, then Gazprom can supply the required volumes. Currently, the possibility of connecting the Turkish Stream gas pipeline to the TANAP is being considered, and a Russian company is completing construction works of the mentioned pipeline.

So – neither more nor less. Imagine: the Europeans, who made so much effort on promoting the Southern Gas Corridor project and diversifying their gas supply, open a valve in 2020, and Russian gas through the SGC. Well, what to do if your gas is not enough. Then you have to let Russian gas into the Southern Gas Corridor. It’s only Europeans who will need to be questioned first. After all, Europeans will pay for music, that is, gas.