Complementarity of SGC Bundles
Infrastructure investments are huge and risky. Therefore, perceived import as well as export risks should be reduced as far as possible by minimising areas under monopoly through additional diversification, providing access to as many high price markets as possible.
Since there is sufficient gas available in Azerbaijan and Turkmenistan to feed two PCI projects, a concept of two entry points in line with two routes – terrestrial via Turkey and underwater across the Black Sea – is envisaged within the Southern Gas Corridor scheme. Overall, the Southern Corridor will benefit from such internal route diversification: the two main routes are not in competition with each other, but together help reduce perceived geopolitical risks. Such an approach opens up the “Big Gas Strategy” and supports upstream investments. Advancing preparation towards the FID stage for White Stream will also accelerate the endorsement of intergovernmental agreements on a trans-Caspian crossing.
This concept of synergy was first illustrated from the EU side in a 2009 report of then-EU Southern Corridor coordinator Mr. van Aartsen. The report suggested that White Stream would create a synergy with projects via Turkey and justify the need for the coordinated development of both transportation routes.
A 2010 study commissioned by DG ENER to evaluate the trans-European energy network policy (TEN-E) has emphasized the complementarity of Nabucco and White Stream (i.e. Turkish and cross-Black Sea routes), stressing that the two “have often been presented as two alternative options. However, given the political scale and their impact, they are included [as] complementary projects.”
On 20 May 2010, the European Parliament furthermore stated its support for an approach of two entry points in a resolution: “[The European Parliament] recognises the significance of the region for the EU’s energy cooperation and energy security, especially in the context of the development of the Southern Corridor (Nabucco and White Stream).”
The European Commission’s communication “Energy infrastructure priorities for 2020 – A Blueprint for an integrated European energy network” underscores two entry points in relation to Caspian gas, stating, “The key transit state is Turkey, with other transit routes being through the Black Sea and the Eastern Mediterranean.” The work started by our team on underpinning pipeline projects via Turkey by a complementary cross-Black Sea pipeline has contributed towards the start of formal negotiations on westward transportation of gas from Turkmenistan. The European Commission co-funded feasibility studies which have demonstrated commercial comparability of WHITE STREAM with a Turkish onshore route. European Commission representatives have been highlighting such internally diversified Southern Corridor plan in discussions with Turkmenistan and Azerbaijan. At the Turkmenistan Gas Conference on 14 April 2010, Energy Commissioner Oettinger already stated that “several projects make up the Southern Corridor, including Nabucco, the interconnector between Turkey, Greece and Italy (ITGI) and White Stream”.
Project Stages Towards Operation