First Azerbaijani gas reaches Albania amid COVID-19
First Azerbaijani gas via Trans Adriatic Pipeline (TAP) reached Albania at the end of May, 2020. This marked the first delivery of natural gas from Azerbaijan’s Shah-Deniz -II field in the Caspian Sea to Europe via the multimillion megaproject - the Southern Gas Corridor (SGC). Despite the COVID-19 induced pandemics and global lockdowns, this is an important achievement testifying to the successful implementation of works in all four segments of the Southern Gas Corridor, including its final portion – TAP. The Southern Gas Corridor is set to be fully operational in 2020 and it seems that Italy will also receive its earmarked portion of natural gas quite soon.
By Dr. Esmira Jafarova
After Azerbaijan started its journey as an energy exporting country upon signing of the “Contract of Century” in 1994 together with its international partners to embark on the exploitation of hydrocarbon resources of the Caspian Sea, the ensuing developments became the natural outcomes of the thoughtful energy strategy initiated by national leader, the late President Heydar Aliyev. Baku-Tbilisi-Ceyhan oil (2005) and Baku-Tbilisi-Erzurum (2006) gas pipelines further enhanced Azerbaijan’s role as an energy producer and exporter country, whose name is also associated with large-scale regional energy infrastructure projects. Azerbaijan boasts 2,6 trillion cubic meters gas reserves and when the existing Baku-Tbilisi-Erzurum gas pipeline did not suffice for the transportation of Azerbaijan’s gas reserves, the idea of the Southern Gas Corridor got momentum in 2013. In 2013 another important development for the Southern Gas Corridor became the finalization of the debate over the final itinerary of the project, when Azerbaijan selected the Trans-Adriatic Pipeline (TAP) over the competing Nabucco-West project for the transportation of Caspian gas reserves to Europe.
The 3500 km-long Corridor consists of four segments – “Shah Deniz-II” project, Southern Caucasus Pipeline Extension (SCPX), Trans Anatolian Pipeline (TANAP) and its final portion Trans Adriatic Pipeline (TAP). The Corridor passes through seven countries – Azerbaijan, Georgia, Turkey, Bulgaria, Greece, Albania and Italy, with Italy being the final destination to receive Caspian gas. Official inauguration ceremony of the Southern Gas Corridor happened on 29 May, 2018 in Baku and Phase 0 of TANAP on June 12, 2018 in Eskishehir, Turkey. Later, Phase 1 of TANAP was inaugurated 30 November, 2019 in Ipsala, Turkey. Turkey is already receiving gas via TANAP and as of June 2020 is expected to receive 6 billion cubic meters of gas. Europe is set to receive 10 billion cubic meters of Azerbaijani gas per year and its first harbingers have already arrived in Albanian territory. The Southern Gas Corridor is scheduled to be fully operational by fall 2020 and TAP is almost complete with over 95% completion rate, despite previously facing some problems in Italy’s south over environmental concerns, which later were eliminated with Italian Government finally approving TAP at the end of 2018. It seems that ever since things are at full swing and even the COVID-19 induced challenges did not halt the success of the Southern Gas Corridor.
With COVID-19 pandemics hitting the world and bringing many uncertainties alongside the global lockdowns, global economic activity has naturally slowed down. Consequences of the pandemics are apparently to be dealt with a for long time as it has sent shockwaves throughout the existing global order and economy. While many projects and economic initiatives may have been on hold for some time now, it is nevertheless reassuring to see that the works on the Southern Gas Corridor are continued towards final completion. At the initial stage the Southern Gas Corridor is set to deliver about 16 billion cubic meters of gas – 6 to Turkey and 10 to Europe. However, the project is also built with potential expansion capacity, which could be increased up to 31 billion cubic meters in SCPX and TANAP, and up to 20 billion cubic meters for TAP – thus doubling the latter’s capacity. This also means that Azerbaijan possesses further gas reserves in its portion of Caspian Sea, in Absheron, Umid and Babek fields, as well as Karabakh, Dan Ulduzu and Ashrafi – that might in the future provide additional volumes for the infrastructure and increase gas exports to many corners in Europe. The final stage of the implementation of the Southern Gas Corridor is already happening and successful completion of TAP and the Corridor overall seems to be just around the corner with the first gas pumped into the Albanian section of the pipeline. With the finalization of works on TAP and completion of the Southern Gas Corridor as planned in end 2020, Azerbaijan will contribute to the energy security of Italy as well as of the countries in South Eastern Europe. Through the Southern Gas Corridor Azerbaijan will ensure the diversification of routes and sources for the natural gas alongside contributing to the de-carbonization efforts of the broader continent. TAP also stands out as an important connecting core within the Southern Gas Corridor, and through its linkages to other interconnectors in Europe, such as Interconnector Greece Bulgaria (IGB), Ionian Adriatic Pipeline (IAP), Bulgaria-Romania-Hungary-Austria gas pipeline (BRUA project) can open up new perspectives for other countries to benefit from new supply sources.
The Southern Gas Corridor is also associated with many social benefits, including among others, new employment opportunities in the participating countries, which obviously impacts positively their economies. This once again demonstrates that the Southern Gas Corridor is built in accordance with the sustainable development goals of not only Azerbaijan, but also of other participating countries. To further underscore the importance of the Southern Gas Corridor, the European Union has included the project into European Commission’s list of the “Projects of Common Interest”.
Despite enjoying full support of the European Union, there are apprehensions that potentially changing European Union energy policies with the adoption of the “Green Deal” that is set to make Europe carbon-neutral by 2050, may also alter the position of the Southern Gas Corridor in Europe’s list of priorities. However, as was also made clear by Deputy Director General of the Directorate-General for Energy of the European Commission Klaus-Dieter Borchardt at the 6thmeeting of the Southern Gas Corridor Advisory Council on 28 February, 2020, in Baku, this should not affect the situation with already working projects like the Southern Gas Corridor and that going carbon-neutral in fact does not totally rule out the need for gas in the European Union. This is true also especially in the wake of European Union’s interest to reduce its high dependence on a single supplier, thus ensuring diversification of sources and export routes.
Besides its immediate strategic objective, the Southern Gas Corridor is also a huge infrastructure project – multimillion megaproject – and hence its name, “The Corridor”. The implementation of the Corridor became possible only through consistent and targeted international cooperation, partnerships, political will and unity of purpose that also means that other countries wishing to use this infrastructure that is already in place could potentially benefit from this partnership. It once again testifies to the fact that the Southern Gas Corridor carries a big potential to contribute significantly to Europe’s energy security. However, it is also a two-way street and demonstration of a continuous support by the European Union to the Southern Gas Corridor and its future perspectives is equally important.
Recently we witnessed another momentous achievement in the becoming of the Southern Gas Corridor as the first gas got pumped into the 4 km section of TAP in Albania, between Greek-Albanian border. Further plans include gradually introducing gas into other parts of the Albanian portion of TAP in the nearest future. This milestone was also important because it came amid the COVID-19 craze in the world, that might have potentially created headwinds on the way of progress. This however, did not happen and as the situation stands for today, works towards the timely completion of the Southern Gas Corridor seem to go at full throttle to the greater benefit of Azerbaijan, its immediate neighborhood and ultimately to Europe’s energy security. This also once again attests to the importance attached to the Southern Gas Corridor by its international partners.
Dr. Esmira Jafarova is a Board Member of Baku-based Center of Analysis of International Relations (AIR Center) and the author of the book Conflict Resolution in South Caucasus; Challenges to International Efforts, by Lexington Books, 2015.