The White Stream—A Project of Common Interest of the EU
The White Stream pipeline will branch-off from the existing South Caucasus Pipeline (SCP) at a location south-west of Borjomi in Georgia. From there the pipeline will run west to a new compressor station on the Georgian Black Sea coast where the gas will be compressed to high pressure and taken across the Black Sea in water depths down to 2,000 metres depth to Constanta aria in Romania.
White Stream gas pipeline project (White Stream) is a ‘Project of common interest’ of the EU (PCI).
The EU has provided financial support to the W-Stream group under the Trans-European Energy Networks (TEN–E) Programme of the European Commission and co-funded pre-feasibility studies.
The cross-Black Sea White Stream Gas Transportation Project was designated as a “Priority Project of the EU” back in 2007 and after its commercial viability was proven it became an integral component of the “Southern Gas Corridor”.
On 14 October 2013, White Stream was included in the renewed list of key selected energy infrastructure projects designated as PCI, as a component of the SGC pipeline chain 7.2.2 leading from Turkmenistan to the EU.
Projects that have been assigned the PCI status will benefit from accelerated licensing procedures and improved regulatory conditions and will have access to financial support from the Connecting Europe Facility (CEF), which has been allocated a €5.85 billion budget, inter alia for co-funding strategically important projects for the period 2014 to 2020. The listed projects will be implemented faster and be more attractive to investors. These projects also automatically become beneficiaries of so-called ‘Junker Investment Plan’ of 2014, one third of which (circa €100 billion) is planned to be used for energy related investments. The vast majority of the PCI projects are internal to the EU: only a few projects outside of EU territory are included as parts of the ‘Southern Gas Corridor’ (SGC) supply route, with WHITE STREAM among them.
White Stream Ltd, as an assigned promoter of WHITE STREAM project, enjoys exclusive rights to financial support for the project via special grants from the EU budget, which could cover up to 50% and even, if justified, up to 75% of construction costs. It will also be eligible for favourable credit terms through the European Investment Bank and other institutions.
WHITE STREAM as a project of the Southern Gas Corridor
The Southern Corridor structure currently includes two separate pipeline bundles. Both start from Turkmenistan using the ‘Trans-Caspian Pipeline’ (White Stream), link into the expanded ‘South Caucasus Pipeline’ (SCP), then split into two trunks that will provide two entry points into the EU energy market – one via Turkey’s TANAP and the ‘Trans Adriatic Pipeline’ (TAP) and the other via the WHITE STREAM across the Black Sea.
The WHITE STREAM project is an EU supported initiative intended to secure a second entry point to European energy markets for Caspian gas when the capacity of White Stream increases and would warrant the implementation of a second additional route. The internal diversification within the Southern Gas Corridor is intended to mitigate the risks associated with a monopoly over the gas flow by a single transit country (in this case, Turkey, which in addition to gas from Azerbaijan will soon also become a conductor for gas from Iraq, Iran, Russia, and other sources) that could discourage desired large scale investments.
According to adopted EU documents, 10 to 20% of the EU gas demand is to be met by deliveries through the Southern Gas Corridor in the near future. This corresponds to 45 to 90 Bcm/y. Azerbaijan will be capable to supply 10 billion cubic meters to Europe per year starting 2019. At the same time, Turkmen gas could flow to the West. An important factor for the EU market, as well as governments in the Caspian region and potential upstream investors, is the security and continuity of transit. The coordinated development of TANAP and White Stream, both in conjunction with White Stream, will offer producers and shippers security of export. These projects are therefore mutually reinforcing and the important result is not only 60+ Bcm/y of additional capacity, but also a reduction of perceived transportation risks.