South Stream & Nabucco

South Stream & Nabucco

The rivalry between Azerbaijan and Russia trying to gain access to the market of Southeast Europe have became Moscow's halting of the South Stream pipeline according to Azerbaijani sources.


If Azerbaijan has already provided supply route and starts to create together with partners an infrastructure, which includes TANAP and TAP pipelines as well, then Russia is still ahead of this whole process, considering Europe's agreement. The European Union by the way was the one that basically "killed" the South Stream.


Even if Russia gets access to the TAP pipeline, it will be able to provide only one fifth of the gas (of about 50 billion cubic meters per year), which this country intends to supply on the border of Turkey and Greece. Thus, Russian gas can actually rely only on the Greek market for now. However, the market of this country is very small. In 2013, the volumes of gas consumption in Greece totaled only 3.6 billion cubic meters.


Azerbaijani and Russian interests have already once clashed on Greek market. The national companies of both countries – SOCAR and Gazprom – were competing for the right to purchase Greek DESFA gas transmission system operator. And the Azerbaijani company became the winner of this competition.


But still Russia tries to get close to the European market and Azerbaijan waits for Brussels to show a decisive position, especially on the issue related to the decision on DESFA.


Today, Greece can be the last obstacle to Russia’s gas expansion to Southern Europe. Currently, the interests of producers from various regions are clashing in Southern Europe. It should be taken into consideration that Israel also plans to supply gas in this direction.


The Russian gas sold to the European Union comes largely from West Siberia and Yamal, and there is no connection to another export route at present. If the European Union reduces its import in the short term the Russian gas would just stay in the ground, as indeed is happening at Bovanenko now. If Europe reduces demand for Russian gas below current levels the gas would effectively be stranded, unless Gazprom built huge new LNG export capacity, which seems unlikely at present and there are no alternative markets and will not be for many years if ever.



Tag(s) : #Energy Union, #Foreign Affairs