Southern Gas Corridor, Milestones And Other Turkmen Gas Export Options (Via Turkish Stream)

Year 2016, Issue: 1, 124 - 133, 30.01.2016

Oğuzhan Akyener

Abstract

EU is the biggest energy
importing structure in the world and Russia is her major supplier. EU energy
security troubled by increasing political conflicts with Russia rushes EU to
diversify her energy supplies.

One of the most popular
candidates for EU’s future energy supply is the Caspian resources placed in
between Russia, Azerbaijan, Turkmenistan, Iran and Kazakhstan, however, as of
today (due to political reasons) only Azeri and Turkmen natural gas resources
have the priority for EU’s future energy security strategies. These strategies
under the forth corridor
concept by EU were partly realized through southern gas corridor
(SGC) initiated by Azerbaijan. In such a corridor Azerbaijan is planned to be the
main supplier country and to a greater extent Turkmenistan and others as well.
While Azerbaijan and Turkey will be the transit countries and EU and also
Turkey will be the markets in demand.

As there are no important
political obstacles for Azerbaijan as the supplier, demand market or transit
countries however; unreconciliated political situation of the Caspian Sea is
one of the most important milestones for potential supplier Turkmenistan to
flow its gas through Caspian to Azerbaijan stepping forward with the corridor
since early 2000.  Moreover, the political encouragements and support
of EU and US, and related parties have not been enough to take tangible steps
to resolve the problem.

However, in any case, even if the
linkage of Turkmen gas to Azerbaijan flowing through the demand market is
assumed politically possible, another important matter will be the economic
fundamentals as a determining factor for consideration.

In this paper, initially by
assuming the political conflicts on Caspian is resolved, success rate and
future of Southern Gas Corridor will be evaluated from the view of capacity
point through assessing potential shippers, and of economic parameters, then
the place of Turkmen gas in  SGC will be evaluated. In addition, for
Turkmen gas exportation to EU, other two possible roots: through Iran &
Turkey and Russia & Turkey (through new popular line Turkish Stream) will
be analyzed in terms of economic parameters affecting the end market
competition.

Keywords

Southern Gas Corridor, Turkmen Gas Export Options

References

• 1 BP Statistical Review, “World Energy”, 2014. 2 Oguzhan Akyener, “Caspian Gas Politics & Struggle Between Main Energy Players”, World Petroleum Congress, 2014. 3 Oguzhan Akyener, “Doability Of Trans-Caspian Pipeline And Deliverability Of Turkmen Gas To Turkey & Eu”, Pipeline Technology Journal, 2014. 4) Personal Communications: Tayfun Yener Umucu. 5) TURAN Energy News, Baku, 17 April 2015.