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With TAP Selection, Caspian Gas to Europe Will Soon Be a Reality

Alexandros Petersen Tuesday, July 30, 2013

Late last month, more than a decade of indecision over the so-called Southern Gas Corridor linking Caspian reserves to European Union markets finally came to an end with the selection of the Trans-Adriatic Pipeline (TAP) by the Shah Deniz consortium of gas producers in Azerbaijan. TAP was selected over the much more widely recognized and operatically named Nabucco pipeline, which had captivated the energy industry and shaped the geopolitics of the Black Sea-Caspian region for years. Shah Deniz consortium members, which include BP, Statoil, Total and Azerbaijan’s national energy company SOCAR, insist that the selection was based almost entirely on commercial considerations. While politics almost certainly played a role in the decision, it is the case that TAP was the most commercially viable and realistic of the two options. Had it not been for the Nabucco consortium’s skillful public relations campaign, the selection of TAP would have been a no-brainer.

The insinuation, however, by a number of observers that the TAP decision was a victory for Russia’s regional energy bully Gazprom is not only false, but gravely misleading. The “long battle of pipeline politics” in the region was in recent years not between Gazprom’s alternative South Stream pipeline and the European-led projects, but rather among Western-led projects and routes. South Stream’s lack of available gas and Gazprom’s financial, technological and strategic woes of late meant that Russia had for all intents and purposes lost its battle long before Shah Deniz made the pipeline selection. It is true that Nabucco’s proposed route through Central Europe would have, in geographic terms, competed directly with Gazprom’s distribution heartland, but the priority for the Southern Gas Corridor was getting resources to market, and any new gas to the EU is good gas. ...

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