Russia concerned of Azerbaijani gas to Europe

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Russia is concerned that its exporting rivals have noticeably revived:  in a few years Azerbaijani and Iranian gas will reach the European market.

The Russian edition YTPO.Ru publishes material on the situation in the gas sector, in which Azerbaijani gas competes with Russia, reports.

According to the publication, “The Azerbaijani parliament has recently ratified an agreement with Turkey on gas transit and construction Trans Anadolu Pipeline (TANAP) for this purpose. The agreement, signed in June last year, stipulates the construction of a gas pipeline 16 billion cubic meters a year capacity across Turkey from east to west, with part of the existing infrastructure operated. The project cost is estimated at $ 7 billion, 80% share belonging to the Turkish company BOTAS, and 20% — Azerbaijan. The pipeline is to be constructed by 2018. Later, the TANAP capacity will be increased to 31 billion, and possibly up to 60 billion cubic meters a year — depending on the needs.”

“And the needs can be considerable. Turkey plans to import only 6 billion cubic meters of gas, the rest is for Europe. Azerbaijani gas will be delivered through via the Trans Adriatic Pipeline (TAP) — across Greece and Albania, then on the bottom of the Adriatic Sea to Italy, or Nabucco West — through Bulgaria, Romania, and Hungary to the Austrian Baumgarten gas distribution hub. The first option is a half time as short, and therefore significantly cheaper. And, by the way, a week earlier Greece, Albania and Italy signed an intergovernmental agreement on the construction of TAP, which gave the project the necessary public support.

However, the second draft is not discarded: the consortium Nabucco Gas Pipeline International and the Italian company Saipem contractor signed a contract to provide services for the design of Nabucco-West at the end of January. So the competition is not weakening. Brussels does not interfere in this struggle: it will be happy with any pipeline, reducing EU dependence on the Russian gas.

So, a final decision will be taken by members of the consortium who develop the giant gas condensate field “Shah Deniz” in Azerbaijan (seven companies, including Azerbaijani Socar, BP as operator, Norway’s Statoil and our LUKOIL). And they intend to do this by the middle of this year,” — says the publication.

“In this context, the “South Stream” will not be welcomed in Europe: it does not weaken, but rather strengthens the EU’s gas dependence on Russia. Brussels, of course, has no right to prohibit members and their partners to build the pipe they need (if it meets all environmental requirements), but can thoroughly ruin plans for its use.

The matter is that according to the latest rules for regulation of the European energy market, any fuel suppliers should have equal access to the pipeline system, including cross-border pipelines.

That is, theoretically, there can merge such a situation when the “South Stream” will be built at the expense of Gazprom, Brussels will require allowing the Azerbaijani gas in this pipeline. It’s impossible in the case of the “Nord Stream” — it had already been removed from the scope of the “Third Energy Package” of the European Commission. However, it will not be that easy for the “South Stream” to get such an exception: the competition of suppliers in the Black Sea region is too high, and the developers of “Shah-Deniz” aim to save a few billion on the pipe to Europe”, — the article states.