Hopes of Diversifying Europe's Gas Imports Reduced

Russia’s agreement with Italy to build a new gas pipeline direct to Europe is another blow to the Transcaspian Gas Pipeline project, which would take a route bypassing Russia, say NBCentralAsia analysts.



On June 23, the Russian energy giant Gazprom and the Italian oil and gas corporation ENI signed an agreement on the Yuzhny Potok or “Southern Flow” pipeline which would supply Europe with gas. Two days later, Greece expressed an interest in joining the venture. The pipeline, with an annual capacity of 30 billion cubic metres a year, would run part of the way under the Black Sea.



Analysts say that despite recent noises from Turkmenistan that it might join the alternative Transcaspian Gas Pipeline, TGP, the likelihood of that actually happening has been further reduced by the Yuzhny Potok agreement. The TGP, a project favoured by European governments, would run from Central Asia under the Caspian to Azerbaijan and on to European markets, providing a route not reliant on Russia.



The TGP project was dealt a blow in May after Russia, Turkmenistan and Kazakstan agreed to build a pipeline skirting the eastern Caspian and leading to Russia.



Political scientist Maxim Kaznacheev says the TGP project participants have been slow to produce a feasibility study and are lagging well behind their competitors.



According to Kaznacheev, Yuzhny Potok is likely to bring gas to exactly the same customers as the projected TGP, and there is simply no need for two routes serving the same market.



“Procrastination over securing sources of gas supplies for TGP in the short term will result in the project being shelved,” he said.



Andrei Chebotarev, director of the Alternativa think tank, insists that Yuzhny Potok does not necessarily affect the technical aspects of TGP. It is the political factor that makes the two projects competitors.



“If Kazakstan and Turkmenistan are indecisive [about TGP] because of Russian pressure, there is a risk that the project would be less than effective, if it does not fail altogether,” he said.



Chebotarev is not writing off TGP completely, given the current availability of Azerbaijani gas and the prospect of adding Turkmen and some Kazak gas in the future.



(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)