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Southern Gas Corridor

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The Southern Gas Corridor is an initiative of the European Commission for the natural gas supply from Caspian and Middle Eastern regions to Europe. The main goal of the Southern Gas Corridor is to reduce Europe's dependency on Russian gas. The route from Azerbaijan to Europe consist of the South Caucasus Pipeline, the Trans-Anatolian Pipeline, and the Trans-Adriatic Pipeline. The total investment of this route is estimated US$45 billion. The main supply source would be the Shah Deniz gas field, located in the Caspian Sea.

History

The initiative was proposed in the European Commission's Communication "Second Strategic Energy Review – An EU Energy Security and Solidarity Action Plan" (COM/2008/781) in 2008. The European Union identified a number of partner countries for this initiative, such as Azerbaijan, Turkey, Georgia, Turkmenistan, Kazakhstan, Iraq, Egypt and Mashreq countries. Uzbekistan and Iran should represent, when political conditions permit, a further significant supply source for the EU.

On 8 May 2009, the summit "Southern Corridor – New Silk Road" was held in Prague.

Technical description

In the Trans-European Networks – Energy (TEN–E) program, the European Union designated three of the pipelines as of strategic importance (ITGI, Nabucco and White Stream)." Also the Trans Adriatic Pipeline was identified that time as as a Southern Corridor project. It was planned that the Southern Corridor projects could provide the necessary transportation capacity to deliver 60–120 billion cubic metres per annum (2.1–4.2 trillion cubic feet per annum) of Caspian and Central Asian gas directly to Europe.

As of 2017, the corridor would pass through Georgia, Turkey, Greece, Albania and Italy and consists of three main projects:

  • the South Caucasus Pipeline extension (SCPx) through Azerbaijan and Georgia;
  • the Trans-Anatolian Pipeline (TANAP) through Turkey;
  • the Trans-Adriatic Pipeline (TAP) through Greece, Albania, and Italy.

This combination of these pipelines will be nearly 3,500 kilometres (2,200 mi) long. The total cost of these projects is estimated $45 billion.

Controversies

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Gas demand

Between 2010 and 2015, gas demand in the European Union has decreased more than 20%. At the same time, gas projects are evaluated with a more than 70% higher gas demand scenario in 2030.

The EU has an overall surplus of gas import infrastructure and many of import capacities are underutilized. One the other hand, the EU goals for energy efficiency would reduce gas demand in the next years. The EU has set itself a 20% energy savings target by 2020 when compared to the projected use of energy in 2020.

European Climate Policy

The key targets of the EU on climate policy by 2030 are at least 40% cut in greenhouse gas emissions compared with 1990, 27% of total energy consumption from renewable energy and 27% increase in energy efficiency. According to the International Energy Agency, "no more than one-third of proven reserves of fossil fuels can be consumed prior to 2050 if the world is to achieve the 2°C goal".

Diversification

With the SGC, one of the goal on the EU is to diversify natural gas supply routes and reduce dependency from Russia. Russia supplied about one third of the EU gas consumption in 2013, mainly through Gazprom. However, the European Bank for Reconstruction and Development (EBRD) is to lend US$200 milion to Lukoil to develop the Shah Deniz gas field in Azerbaijan. The Russian company Lukoil owns 10% of the field.

Supporting the Azerbaijan government

Building SGC, European countries and companies support gas export from Azerbaijan and contribute to finance Azerbaijan's government. The regime is considered by many NGOs and watchdogs organizations as repressive and activists and journalists are regularly arrested on false charges and imprisoned. The International Federation for Human Rights (FIDH) wrote in 2015, that "for more than a decade Azerbaijan has made shameless use of caviar diplomacy to charm European governments, its most important oil and gas clients". The CEE BankWatch warns that "Developing Shah Deniz stage 2 and the Southern Gas Corridor is likely to cement further the oppressive structures of the Aliyev government".

Suspicions of corruption

An Italian politician, Luca Volontè, former member of the Union of the Centre party in Italy, is accused of quelling a human right report criticizing Azerbaijan. Luca Volontè was at that time president of the European People’s party in the Council of Europe. He is currently being investigated by the Milan public prosecutor’s office for supposedly accepting €2.39 millions in bribes. The approval and the publication of the human right report would have created difficulties to the Southern Gas Corridor project. The money is supposed to have been transferred by British companies, through a complex money laundry web and to come from friends of president Aliyev.

References

  1. ^ "Gas and oil supply routes". European Commission. Retrieved 9 January 2017.
  2. ^ Columns. "Southern Gas Corridor". www.tap-ag.com. Retrieved 9 January 2017.
  3. ^ "Pipedreams: Public subsidies for Lukoil in Azerbaijan". Issuu. Bankwatch Network. 22 January 2015. Retrieved 6 January 2017.
  4. ^ "EU aims to solve 'Southern Gas Corridor' puzzle". EurActiv.com. 5 May 2009. Retrieved 13 November 2009.
  5. ^ "Communication from the Commission of the European Parliament, the Council, The European Economic and Social Committee and the Committee of the Regions. Second Strategic Energy Review – An EU Energy Security and Solidarity Action Plan". European Commission. 13 November 2008. Retrieved 13 October 2014.
  6. "Summit "Southern Corridor – New Silk Road"". Government of the Czech Republic. Retrieved 13 November 2009.
  7. van Aartsen, Jozias (4 February 2009). "Project of European Interest № NG3. Activity Report September 2007–February 2009" (PDF). European Commission. Retrieved 25 January 2010.
  8. Joshua Chaffin, EU plan to loosen Russia's grip on energy, Financial Times, 13 Nov 2008.
  9. Columns. "Southern Gas Corridor". www.tap-ag.com. Retrieved 5 January 2017.
  10. "File:Gross inland consumption of natural gas in EU-28 (1), in thousand terajoules (Gross Calorific Value) new.png - Statistics Explained". ec.europa.eu. Retrieved 8 February 2017.
  11. "Energy Security and the Connecting Europe Facility". Third Generation Environmentalism Ltd. Retrieved 8 February 2017.
  12. "Rethinking the security of the European Union's gas supply | Bruegel". bruegel.org. Retrieved 8 February 2017.
  13. "Energy Efficiency - Energy - European Commission". Energy. Retrieved 8 February 2017.
  14. Anonymous (23 November 2016). "EU climate action - Climate Action - European Commission". Climate Action - European Commission. Retrieved 8 February 2017.
  15. "International Energy Agency - World Energy Outlook 2012 - Executive Summary" (PDF). {{cite web}}: Cite has empty unknown parameter: |dead-url= (help)
  16. "Clingendael International Energy Programme - Russian Gas Imports to Europe and Security of Supply (Factsheet)". {{cite web}}: Cite has empty unknown parameter: |dead-url= (help)
  17. "Lukoil Overseas: Shah Deniz Gas Condensate Field Develop. II". www.ebrd.com. Retrieved 25 January 2017.
  18. "'Azerbaijan is turning into a dictatorship – we shouldn't fall for its caviar diplomacy'". Worldwide Movement for Human Rights (in French). Retrieved 9 February 2017.
  19. Doward, Jamie (31 December 2016). "UK companies 'linked to Azerbaijan pipeline bribery scandal'". The Guardian. ISSN 0261-3077. Retrieved 10 February 2017.
  20. "Principles down the pipeline". openDemocracy. 21 December 2016. Retrieved 10 February 2017.
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