South Stream 2.0, TAP, TANAP, Southern Corridor, Nabucco: The Muddle of East-West Transnational Gas Pipelines

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South Stream 2.0, TAP, TANAP, Southern Corridor, Nabucco: The Muddle of East-West Transnational Gas Pipelines

Wed, 01/14/2015 - 10:01
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Southern Gas Corridor - TAP and TANAP (© 2014 TAP AG)
Southern Gas Corridor - TAP and TANAP (© 2014 TAP AG)

With South Stream called off by the Russians, will South Stream 2.0 fare better? Will either the Trans-Adriatic Pipeline or Trans-Anatolian Pipeline be viable if Turkmen gas is not added to the mix? Will Nabucco be resurrected amidst all the uncertainty?

South Stream 2.0, envisages the shipment of Russian gas to Turkey via a new pipeline running along the Black Sea floor. Thus far the project rests on a Memorandum of Understanding which has no legal force. A feasibility study must be undertaken to answer, among many other questions, how Gazprom will deal with the EU unbundling requirement; which pipelines will be used to carry the Russian gas further from the Turkish - Greek border; and who is going to pay for Russia - Turkey pipeline?

TAP and TANAP similarly face several imponderables -- the Azeri Shah Deniz II gas field will be the main source of gas for these pipeline projects, and while large with a volume of approximately 1 trillion cubic meters, Turkmen gas has long been sought for both projects to complement this amount and ensure the viability of the undertaking. Yet without any final adjudication of Caspian Sea boundaries it is highly unlikely that Turkmen gas will ever make its way to Europe.

Some regional experts suggest bringing Russian gas into TAP and TANAP. Indeed, allowing Russian gas at plausibly lower prices than Azeri gas into these two prospective pipelines would lower network costs for the operators. And given the progress of Iran's nuclear negotiations with the West, it is not inconceivable that sector sanctions are eased and that Iranian gas enters the picture at some point in the near future.

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