Southern Gas Corridor: Trans Anatolian Natural Gas Pipeline (TANAP) Opened

The long-standing plan of the European Union to diversify its gas supplies received a boost yesterday, when a missing link of the so called Southern Gas Corridor, the TANAP-pipeline, has been officially opened by the presidents of Turkey and Azerbaijan. TANAP is the second of the three pipelines that cumulatively create the Southern Gas Corridor starting operations. The ultimate aim of the Southern Gas Corridor is to bring gas from Azerbaijan`s Shah Deniz gas fields to Europe to reduce import dependence on Russian Gas. The final leg of the corridor, the Trans-Adriatic Pipeline (TAP), however, has not yet been opened and questionsare abundant.
The turkish town of Eskişehir yesterday became the scene of the grand opening ceremony for the TANAP pipeline. The pipeline is running from the Georgian/Turkish to the Turkish/Greek border. It will deliver 6 billion cubic meters per year (bcm/y) of Azeri gas to Turkey and 10 billion bcm to Europe. The European part of the project is expected to become operational in 2020. Azerbaijan’s SOCAR has a 51 percent stake in the project, while Turkey’s BOTAŞ has a 30 percent, BP a 12 percent and SOCAR Turkey a 7 percent share.

In a first reaction, European Commission Vice President Maroš Šefčovič, who is in charge of the Energy Union applauded the step, saying in a statement: ` Today, we are turning intentions into reality and delivering another tangible result under the Energy Union. By helping diversify our energy suppliers and routes, the Southern Gas Corridor is strategically important for the EU's
energy security, including in the most vulnerable parts, such as South-East Europe and Southern Italy.`

He appeared optimistic about the completion of the Southern Gas Corridor, adding `I trust that the construction of the TAP, a European section of the Southern Gas Corridor, will continue to progress also thanks to the continuous support of the three national governments
involved, so that Caspian gas reaches the EU by 2020. It will bring significant benefits to its host, transit and destination countries, including their local communities - in terms of
investment, jobs as well as lower energy prices for consumers and transitioning to low-carbon economies.`

In reality, however, the final leg of the Southern Gas Corridor, the TAP,  is the most embattled. There have been questions about the economic feasibility of the pipeline that is supposed to run from the Greece/Turkish border to Italy and ultimately transport gas to western Europe. With the new populist government taking office in Italy, there are also political doubts about the willingness to pursue the project.

In addition, there are legal issues with the qualification of the TAP. The main question is whether it has to be seen as a transit pipeline or as a gas interconnector. The European Union is eager to qulify it as an interconnector, so that the entire unbundling and TPA regime of EU law applies to it. The EU has taken steps in November 2017 in the context of the Nord Stream 2 project to change the legal regime for pipelines coming into the EU and those new rules are also likely to apply to the TAP. The proposed changes have been discussed in detail earlier on this blog.


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