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    Pay Attention To Gazprom Competition, Wood Mackenzie Tells TANAP

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Summary

Gazprom’s interests and technical complexities of the offshore gas fields in the Caspian Sea could pose a threat for future developments

by: Sergio

Posted in:

Natural Gas & LNG News, , Trans-Anatolian Gas Pipeline (TANAP) , News By Country, Turkey

Pay Attention To Gazprom Competition, Wood Mackenzie Tells TANAP

Despite hurdles around the corner, the ceremony for the Trans-Anatolian Pipeline that took place in eastern Turkey on Tuesday is a positive sign for European energy security, wrote Wood Mackenzie.

"Today's ceremony confirms the Southern Gas Corridor is on schedule… However, future supply beyond Shah Deniz will take time to develop and the project will have to face up to Gazprom's clear intent to retain its market share in Europe through the Turkish Stream project” Samuel Lussac, Caspian Upstream research manager at Wood Mackenzie, commented. 

According to consultancy, Gazprom’s interests and technical complexities of the offshore gas fields in the Caspian Sea could pose a threat for future developments. The 1,850-kilometre pipeline, which should provide Europe with 10 bcm of gas from 2019, is benefitting from the political support of European, Turkish and Azeri heads of state.  

‘Gazprom's recently announced Turkish Stream project poses further risks to TANAP expansion. Both pipelines will be ending at Ipsala, where the Trans-Adriatic Pipeline (TAP) starts… This means that any upstream project willing to capitalise on TANAP expansion is therefore likely to compete with Russian gas to access infrastructure west of Turkey’ Wood Mackenzie commented, reminding that only TAP's initial capacity is exempt from third party access (TPA) for the next 25 years. Future TAP expansions would not benefit from similar exemptions.

On Tuesday, Turkish President Recep Tayyip Erdoğan, Azerbaijani counterpart Ilham Aliyev and Vice-President for Energy Union Maroš Šefčovič attended the ceremony. Šefčovič and Turkish Minister for Energy and Natural Resources, Taner Yildiz, also launched the High Level Energy Dialogue.

‘The development of Turkey as a regional natural gas hub is of mutual interest and was taken up in the EU–Turkey Strategic High Level Energy Dialogue. A regular exchange of information on energy cooperation at the global and regional level would be to the benefit of both sides’ reads a joint declaration released by European and Turkish authorities

The TANAP ceremony follows the completion of BP and BOTAS’ entry into the project. As a consequence, SOCAR holds a 58% stake, while BOTAS and BP 30% and 12% respectively.

Meanwhile, in Europe, national governments have dismissed the idea of handing out their authorities to Brussels in a draft document. European leaders will meet on Thursday to discuss the Energy Union.