Southern Gas Corridor - strategic success of Azerbaijan

By Trend

The Southern Gas Corridor is an energy security and energy diversification project. Energy security today is an issue of national security for all countries.

Energy diversification is also important for consumer and producer countries. Thus, I think that we have achieved an unprecedented format of cooperation. There is a correctly calculated balance of interests, where the interests of Azerbaijan as a producer coincide with the interests of transit countries and consumers. The implementation of the project, which some individuals considered unreal, became possible thanks to this.

These views, voiced by President of Azerbaijan Ilham Aliyev on February 11 during a speech at the 7th videoconference meeting of ministers within the Southern Gas Corridor Advisory Council, reaffirmed the importance of this project both for the region and the entire European continent.

All officials represented on the Advisory Council, as well as individual international experts, stressed that the Southern Gas Corridor will play a very important role in the European energy market.

Southern Gas Corridor diversifies EU energy supply

"The Southern Gas Corridor helps the EU to diversify its energy supply and offers our citizens more choice and more competition," the EU Commissioner for energy Kadri Simson said. "In fact, in Italy, we are already seeing decreases in gas prices at the beginning of the year. Our success also means the beginning of a new partnership. With the Corridor, the EU and Azerbaijan are now strategic energy partners."

"We did not achieve this by chance or on some conditions," Simson said. "We have come to this point today because all the participants in today's meeting have worked tirelessly and demonstrated commitment. First of all, I would like to thank President Aliyev for his position, determination, and strategic management throughout all these years. I would also like to express my gratitude to Georgia, Turkey, and Albania. Our corridor runs through your territories. Without you, the Southern Gas Corridor project would not appear. "

Southern Gas Corridor supports the resilience of our economies

"The Southern Gas Corridor has been a part of our Eastern Partnership policy agenda "20 deliverables for 2020"," said Commissioner for Neighbourhood and Enlargement Olivér Várhelyi.

"Building on those achievements, we presented last March a Joint Communication on the future policy priorities of the Eastern Partnership, putting resilience at the heart of our cooperation - resilience when it comes to economy as well as energy security," Várhelyi added. "We are now fully engaged in elaborating a plan to implement these priorities - with real targets and objectives. The work done for the Southern Gas Corridor is an inspiration in this context. Strengthening transport and energy connectivity and security of supply supports the resilience of our economies."

Azerbaijan's strategic success

Gary Jones, BP Regional President for Azerbaijan, Georgia, and Turkey stressed that Azerbaijani gas is being transported from the Caspian Sea directly to Europe for the first time.

"The leadership of President Aliyev, as well as his outlook on the future, connected with his country and the entire region, gave a powerful impetus to make this historic achievement a reality," Jones said conveying congratulations on this strategic success.

"President Aliyev’s personal efforts played a significant role in the successful implementation of the project, which has become one of the most challenging projects in the global oil and gas industry," Jones said. "BP is proud to be involved in all phases of this project, which will benefit people in the region and Europe for decades to come."

Turkish Energy and Natural Resources Minister Fatih Donmez stressed that the Southern Gas Corridor will benefit the entire region and will become the basis for regional cooperation.

"Without the political support of Turkey and Azerbaijan, the Southern Gas Corridor could not have appeared," Donmez added. "Without political support, this pipeline, which runs from Azerbaijan to Europe, could not have come true. So we have benefited the entire region."

Southern Gas Corridor is a multidimensional and multilateral achievement in the energy sector

Advisor to the US Undersecretary of State for Energy Diplomacy Kurt Donnelly stressed the strategic importance of the Southern Gas Corridor.

"The transportation of hydrocarbons from the Caspian Sea to Western markets has been carried out for decades. I am glad that the US government and energy companies have played an important role in this ongoing effort. The Southern Gas Corridor is indeed a multidimensional and multilateral achievement in the energy sector. All the countries represented here today have played their role. Including there are numerous companies from all countries participating in the project," Donnelly said.

"European consumers in Italy, Greece, and Bulgaria are using Azerbaijan's natural gas for the first time this winter. We welcome the market trials for the Trans-Adriatic Pipeline, which are expected to start at a later stage in 2021, and sincerely wish to see results by the end of 2021," Donnelly said.

Uninterrupted gas supply to Europe will be ensured

Of course, all these statements regarding the international importance of the Southern Gas Corridor are the unanimous position of the Advisory Council. Let's pay attention to the comments of experts.

"Europe will receive extra gas that it needs via the Southern Gas Corridor and that will be important in the future as the population increases and the demands for more heating and electricity grow, not only for homes but for businesses also," US expert on Central Asia Bruce Pannier told Trend.

"Additionally, it gives Europe another source of gas," Pannier said. "That is always important when negotiating price with other suppliers or in cases when relations with one supplier become complicated, leading to reductions or suspension of supplies from that one supplier. It ensures Europe cannot be cut off from imports of gas."

The clear positive effects of the Southern Gas Corridor (SGC) is increased security of supply and diversification of resource supplies, Cyril Widdershoven, a Middle East geopolitical specialist and energy analyst, a partner at Dutch risk consultancy VEROCY, and Global Head Strategy Risk at Berry Commodities told Trend.

"With an additional inlet for natural gas, non-Russian based, overall energy security inside of EU is increasing in theory. The main goals should be the provision of additional volumes of natural gas to markets not yet covered, especially South-East Europe, while adding to already large markets in South Europe," the expert said.

Prospects of expansion of the SGC are still there, even in light of the ongoing Green Deal discussions inside of the EU, added Widdershoven.

Widdershoven pointed out that while a net-zero target has been set by Brussels, member countries are still in very different phases of the energy transition.

"Looking at latter Eastern Europe or South-East Europe still constitutes a very vast market for coal-oil to natural gas, as the energy transition phase. Additionally, the ongoing issues with renewables and grid in Europe and the working power during cold weather situations or backing up renewables in grid, natural gas will be needed even more to keep the system working," the expert concluded.

The Southern Gas Corridor project is unique in many spheres. Its length is 3,500 kilometers, the project unites seven countries. Without close cooperation among these countries, its implementation would be impossible. The pipeline passes through very difficult geographic areas, including mountains with a height of 2,500 meters while its more than 100 km section - along the bottom of the Adriatic Sea. The Southern Gas Corridor meets the highest environmental standards.

The initial cost of the project was estimated at $44.6 billion. However, as a result of effective management and proper planning, the project cost has dropped to $33 billion. Azerbaijan made a huge financial contribution to the project in the amount of $10 billion and took part in all four segments of the implementation of the Southern Gas Corridor - Shah Deniz, South Caucasus Pipeline, TANAP, and TAP.

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