Southern Gas Corridor, a new spirit in monotone market

If ever there was a project for the European Union to abet and strengthen its energy security it’s the Southern Gas Corridor.

The SGC project – that has already began to take shape as a series of pipelines which will carry Azerbaijani supplies to Europe – is a unique project opening up route for Caspian energy sources.

The mega project both greatly benefits Europe and highlights significance of Azerbaijan as an important country when it comes to oil and gas production, strategic location both to the Eastern and Western markets.

Azerbaijan, which has promoted itself as a key geostrategic and political partner, best positioned to solve Europe’s energy problems. So far, Azerbaijan played important role in providing energy security for the neighborhood, and now, with respect to the implementation of the SGC project will play an important role for European energy security.

Oil pipelines today connect Azerbaijan to the Black Sea and Mediterranean basis thus providing energy security for those countries. Some of the countries in Europe have about 30-40 percent of their oil from Azerbaijan, while the country’s share in meeting the EU's oil demand is 5 percent.

Although as a reliable oil producer and supplier, and also as a reliable transit country, Azerbaijan established itself in the region as a partner that others can rely on, the SGC grants the country a key role.

The project is deemed to change the energy map of the region. The $40 billion project, which is expected to start ferrying natural gas into the European Union by 2020, will be funded by some of the biggest loans ever granted by international financial institutions.

The project, whose economic profitability and transportation capacity is powerful enough, may become a 'wide corridor' in the near future bringing more Caspian and Middle East gas to Europe. By connecting to key infrastructure in the region, such as the Ionian Adriatic Pipeline and the Western Balkans Ring, the route is planned to bring new gas supplies to South-Eastern Europe – Bulgaria, Albania, Bosnia and Herzegovina, Montenegro, Croatia – as well as in the future to countries in Central Europe: Switzerland and Austria.

Additionally, the natural gas can be supplied from Italy onward to France, Germany and even the UK, while possible creation of gas storages in Albania can further enhance the region’s energy security and help tackle unexpected supply disruptions.

Meanwhile the big picture shows that the SGC has created a new model of cooperation between the EU and Azerbaijan. The project is one of the few that is being realized between Europe and non-EU country, thus turning into a huge project of regional cooperation.

As politics and geopolitics emerge as central elements in gas route diversification, the SGC project created an absolutely new regional cooperation format uniting countries of Caucasus and Europe. Supported by the European Commission, this is the very platform offering benefitial interaction between Georgia and Azerbaijan and Turkey, on one hand, and countries of European Union like Greece, Bulgaria and Italy, on the other.

This concept of cooperation creates absolutely new spirit in the system of relations that relies on interconnections, interdependence, predictability, reliability and partnership.

The project is also a central pillar of cooperation in the newlylaunched Brussels – Baku talks on a new cooperation agreement. The Southern Gas Corridor is the most significant economic project of Azerbaijan, making the country more powerful. So, Baku’s relations with the European institutions will considerably strengthen after the accomplishment of this project.

Currently, the implementation of one of the main segments of the Southern Gas Corridor – Trans-Anatolian Pipeline – is complete by roughly 65 percent. Another segment, which is called South-Caucasus pipeline is close to 80 percent. And implementation the Trans-Adriatic Pipeline, which is called TAP, is around 34-35 percent. The development of the Shahdeniz Gas field, which is the biggest or one of the biggest fields in the world, is already 90 percent done. The goal is to deliver first new gas from Azerbaijan to the markets next year, and complete this project by 2020.

The SGC promises to bring a new spirit in the monotone market, thus gifting Azerbaijan a deserved place among Europe's natural gas suppliers.