The Southern Gas Corridor is an initiative of the European Commission for the natural gas supply from Caspian and Middle Eastern regions to Europe. The main goal of the Southern Gas Corridor is to reduce Europe's dependency on Russian gas. The route from Azerbaijan to Europe consist of the South Caucasus Pipeline, the Trans-Anatolian Pipeline, and the Trans-Adriatic Pipeline. The total investment of this route is estimated US$45 billion. The main supply source would be the Shah Deniz gas field, located in the Caspian Sea.
Contents
History
The initiative was proposed in the European Commission's Communication "Second Strategic Energy Review – An EU Energy Security and Solidarity Action Plan" (COM/2008/781) in 2008. The European Union identified a number of partner countries for this initiative, such as Azerbaijan, Turkey, Georgia, Turkmenistan, Kazakhstan, Iraq, Egypt and Mashreq countries. Uzbekistan and Iran should represent, when political conditions permit, a further significant supply source for the EU.
On 8 May 2009, the summit "Southern Corridor – New Silk Road" was held in Prague.
Technical description
In the Trans-European Networks – Energy (TEN–E) program, the European Union designated three of the pipelines as of strategic importance (ITGI, Nabucco and White Stream)." Also the Trans Adriatic Pipeline was identified that time as as a Southern Corridor project. It was planned that the Southern Corridor projects could provide the necessary transportation capacity to deliver 60–120 billion cubic metres per annum (2.1–4.2 trillion cubic feet per annum) of Caspian and Central Asian gas directly to Europe.
As of 2017, the corridor would pass through Georgia, Turkey, Greece, Albania and Italy and consists of three main projects:
This combination of these pipelines will be nearly 3,500 kilometres (2,200 mi) long. The total cost of these projects is estimated $45 billion.
Gas demand
Between 2010 and 2015, gas demand in the European Union has decreased more than 20%. At the same time, gas projects are evaluated with a more than 70% higher gas demand scenario in 2030.
The EU has an overall surplus of gas import infrastructure and many of import capacities are underutilized. One the other hand, the EU goals for energy efficiency would reduce gas demand in the next years. The EU has set itself a 20% energy savings target by 2020 when compared to the projected use of energy in 2020.
European Climate Policy
The key targets of the EU on climate policy by 2030 are at least 40% cut in greenhouse gas emissions compared with 1990, 27% of total energy consumption from renewable energy and 27% increase in energy efficiency. According to the International Energy Agency, "no more than one-third of proven reserves of fossil fuels can be consumed prior to 2050 if the world is to achieve the 2°C goal".
Diversification
With the SGC, one of the goal on the EU is to diversify natural gas supply routes and reduce dependency from Russia. Russia supplied about one third of the EU gas consumption in 2013, mainly through Gazprom. However, the European Bank for Reconstruction and Development (EBRD) is to lend US$200 milion to Lukoil to develop the Shah Deniz gas field in Azerbaijan. The Russian company Lukoil owns 10% of the field.
Supporting the Azerbaijan government
Building SGC, European countries and companies support gas export from Azerbaijan and contribute to finance Azerbaijan's government. The regime is considered by many NGOs and watchdogs organizations as repressive and activists and journalists are regularly arrested on false charges and imprisoned. The International Federation for Human Rights (FIDH) wrote in 2015, that "for more than a decade Azerbaijan has made shameless use of caviar diplomacy to charm European governments, its most important oil and gas clients". The CEE BankWatch warns that "Developing Shah Deniz stage 2 and the Southern Gas Corridor is likely to cement further the oppressive structures of the Aliyev government".
Suspicions of corruption
An Italian politician, Luca Volontè, former member of the Union of the Centre party in Italy, is accused of quelling a human right report criticizing Azerbaijan. Luca Volontè was at that time president of the European People’s party in the Council of Europe. He is currently being investigated by the Milan public prosecutor’s office for supposedly accepting €2.39 millions in bribes. The approval and the publication of the human right report would have created difficulties to the Southern Gas Corridor project. The money is supposed to have been transferred by British companies, through a complex money laundry web and to come from friends of president Aliyev.