In May 2018, near Baku, the official opening of the Southern Gas Corridor (SGC) took place, through which gas from the Azerbaijani Shah Deniz field will go to Europe.
Gas to be supplied from Azerbaijan to Europe - competition for Gazprom?
In May 2018, at the Sangachal terminal near Baku, the official opening of the Southern Gas Corridor (SGC) took place, through which Azerbaijani gas will go to Turkey and Europe. Unlike the expensive American shale gas, the new Azerbaijani gas can be a real competitor to Russian gas.
Azerbaijani President Ilham Aliyev opened the valve, which marks the launch of the pipeline system. He expressed gratitude to the governments of the USA, Great Britain, the European Union and international financial institutions for their assistance in the implementation of the project. According to Aliyev, the Southern Gas Corridor is very important in terms of Europe's energy security. "Azerbaijani gas is a new source of gas supplies to Europe, and with the implementation of the Southern Gas Corridor we are re-drawing the energy map of the continent," he said.
Where is
The SGC includes Azerbaijan, Georgia, Turkey, Greece, Bulgaria, Albania and Italy. Bosnia and Herzegovina, Croatia and Montenegro intend to join the project. The corridor consists of three gas pipelines - South Caucasus, Trans Anatolian (TANAP) and Trans Adriatic (TAP), which will go through Greece and Albania, then along the bottom of the Adriatic Sea to southern Italy. Under it, contracts provide for the supply of 16 billion cubic meters: 6 billion to Turkey via TANAP and 10 billion to Europe via TAP. The plans are to increase the capacity of TANAP to 24 billion cubic meters by 2023 and to 31 billion by 2026. The gas supplied is produced in the Azerbaijani Shah Deniz field. Azerbaijani gas can be a real competitor to Russian gas.
In addition to TANAP, the UGK project also includes the development of the second stage of the Shah Deniz gas field in the Caspian Sea, the expansion of the already operating Baku-Tbilisi-Erzurum pipeline and the Trans-Adriatic gas pipeline. It is expected that 10 billion cubic meters of Azerbaijani gas will be supplied to Europe annually through the Southern Gas Corridor from 2020. Gazprom supplies more than 160 billion cubic meters to the EU (excluding Turkey), and supplies have been growing for three years in a row. Starting from 2020, Azerbaijani gas will compete with Gazprom's in the European market. The main rivalry may unfold in the Italian market. However, in Italy, gas demand is set to rise with the closure of coal-fired power plants there by 2025.
But it is not worth waiting for a drop in Russian gas exports to Turkey and the European Union due to the emergence of a new Azerbaijani player. The Southern Gas Corridor is a very old project, and the competition with it has long been calculated by Gazprom. Therefore, Azerbaijan can only take on the growing demand, and Gazprom's position will not deteriorate.
