Euractiv<\/p>\n
Practical access to Central Asian gas, which would arrive via the twin projects of the White Stream and the Trans-Caspian Pipeline, is finally coming at just the right time to complete the Southern Gas Corridor, writes Robert M. Cutler.<\/p>\n
Robert M. Cutler is a Senior Researcher at the Centre for European, Russian and Eurasian Studies, Carleton University. He is also a Fellow at the Canadian Energy Research Institute.<\/em><\/p>\n It took the EU several years to move in a Central Asian direction for energy security after the US-sponsored project for a Trans-Caspian Pipeline (TCP) for natural gas\u00a0fell apart in the late 1990s<\/a>. Nevertheless, first through\u00a0the 2004 Baku Initiative<\/a>\u00a0and then with\u00a0the 2007 Strategy for a New Partnership<\/a>\u00a0with Central Asia, it began to take those steps.<\/p>\n The EU followed through with practical effect in 2011 when it\u00a0initiated<\/a>\u00a0negotiations with Turkmenistan and Azerbaijan on TCP construction. Last June the Council of the European Union, evaluating the first decade of the EU Strategy for Central Asia,\u00a0concluded<\/a>\u00a0that \u201cthe EU will continue to seek to extend the Southern Gas Corridor to Central Asia, and to further promote the EU\u2019s multilateral and bilateral energy cooperation\u201d with the countries involved.<\/p>\n Key in this policy are not only the TCP but also the White Stream pipeline, planned to transport Turkmenistan\u2019s gas from the South Caucasus directly to EU territory, from Georgia under the Black Sea to Romania. The gas would then flow through existing infrastructure in Ukraine, Slovakia and Czechia to Germany and neighbouring countries. It can also feed new infrastructure being created, such as the Bulgaria-Romania-Hungary-Austria pipeline (BRUA).<\/p>\n Recent developments accelerate<\/strong><\/p>\n Events since spring 2017 have greatly accelerated this development. In April 2017, the\u00a0Georgian Oil and Gas Corporation acquired<\/a>\u00a010% of the two different White Stream and TCP promoter companies. In May\u00a0Georgia\u2019s prime minister Giorgi Kvirikashvili explained<\/a>\u00a0that his country was \u201cworking intensively on the project of transporting gas from Turkmenistan to Europe, the White Stream project, which brings new opportunities for the diversification of Europe\u2019s energy supply.\u201d<\/p>\n Days later\u00a0Kvirikashvili\u2019s\u00a0<\/a>advisor Giorgi Vashakmadze declared<\/a>\u00a0that the EU \u201chas a special interest in the projects of the Trans-Caspian Gas Pipeline and the White Stream\u201d, and in June\u00a0the Council of the European Union reaffirmed<\/a>\u00a0the goal of extending the Southern Gas Corridor into Central Asia. Later that month Maro\u0161 \u0160ef\u010dovi\u010d, Vice-President of the European Commission welcomed Georgia\u2019s accession to the Energy Community and\u00a0singled out its role<\/a>\u00a0in extending the Southern Gas Corridor to additional supply countries.<\/p>\n These developments set the stage for further events in the region itself. In August the leaders of Azerbaijan and Turkmenistan\u00a0signed for the first time<\/a>\u00a0an agreement to bring Caspian energy resources to Europe. In December, Russian foreign minister Sergei Lavrov\u00a0sensationally announced<\/a>agreement among the five littoral states over the text of a Convention establishing a Caspian Sea legal regime.<\/p>\n Azerbaijani deputy foreign minister Khalaf Khalafov\u00a0specifically clarified<\/a>\u00a0that \u201crights for laying pipelines are foreseen in the draft Convention\u201d and that \u201cthose countries through whose sectors [the pipelines] will run\u201d are the ones that \u201cwill coordinate the issue.\u201d The final excuse hindering TCP construction has thus disappeared.<\/p>\n Just last month\u00a0\u0160ef\u010dovi\u010d reaffirmed<\/a>\u00a0\u201cthe Trans-Caspian Pipeline [as] an important, complementary element of the Southern Gas Corridor in order to connect the significant gas reserves of Central Asia to the European markets.\u201d The TCP is on the EU\u2019s List of Projects of Common Interest, qualifying it for preferential financial regulatory treatment by European institutions. Gas from the TCP\u2019s first string looks like reaching Greece and possibly Italy for European distribution in 2020. Gas transiting the second string would arrive in Romania as early as 2022.<\/p>\n For this to happen, necessary steps must be taken expeditiously. Georgia\u2019s energy ministry detailed such a step-by-step road-map late last year to the Energy Community (PowerPoint here<\/a>). According to it, an adequate solution is found to problems of Turkmenistan\u2019s policy of selling gas at its border and banning production sharing agreements.<\/p>\n In this road-map, the Government of Georgia will provide early-stage financial investment usually made by oil and gas majors relying on production sharing agreements. It will enable the project promoter companies to conduct engineering and other studies necessary for obtaining a construction permit. They will identify all capital and operational costs, enabling the promoter, in possession of the construction permits, to announce transportation tariffs for gas delivery to be levied on (presumably European) shippers. On that basis, the shippers can then negotiate sale-purchase agreements with Turkmenistan.<\/p>\n