Political Culminations Increasing as Southern Corridor Race Reaches Final Stretch

The Southern Corridor preferred route selection has reached the final stretch, with a final decision due mid-June between the Trans-Adriatic Pipeline (TAP) and Nabucco West.

One of the countries involved, Greece, aims to promote TAP and has accelerated its efforts in the matter, while also concluding talks regarding the sale of its state-owned natural gas sector. Governmental sources in Athens point out that the recent joint declarations in favor for Nabucco by the governments of Austria, Hungary, Romania and Bulgaria was seen as a direct intervention in order to pressure the Shah Deniz consortium and also the government in Baku.

Nabucco supporters issued an open letter to the EU to openly support that pipeline by citing not only commercial, but also political advantages for the entire European energy market. In turn the Greek and Albanian authorities that stand to lose in case TAP is not selected have come forward and lobbied to a significant extent the Azeri government through multiple visits of the foreign Ministries, while a flash visit by the Greek Premier is expected sometime between 20th and 25th of May.

One of the key countries determining the results, apart from the producing Shah Deniz consortium, is Turkey, which has already achieved under an agreement with Azerbaijan to establish the Trans-Anatolian Pipeline (ΤΑΝΑΡ). At the moment Ankara seems to favor Nabucco at the expense of TAP, aligning with an influential group of incumbent and former State Department figures, such as Matthew Braiza, wnho supports the route of Azeri gas towards the Eastern region of the Balkans and up to Central Europe instead of the Greece-Albania-Southern Italy route. The reasons are primarily the assumption that the diversification of gas imports is more needed in countries like Bulgaria, while the final aim is to create a tremendous gas hub in Austria that will eventually penetrate the German market, which is the prime market for natural gas and will remain so for the foreseeable future.

The Energy Commissioner of the EU Gunther Oettinger, in the meantime tries to keep the balance in all levels and in the midst of an intensive lobbying "battle" between TAP and Nabucco West that is being unfolded in Brussels, Berlin, Baku and in most Balkan capitals. In that sense he has stated that the selection should be based on economic criteria and not political ones, so as not to divide member states. In order to emphasize such statements it was recorded in an official letter sent to the High Representative of the Union for Foreign Affairs and Security Policy, Catherine Ashton.

The Azerbaijani government is keeping a low profile at the moment, assuring all parties of a fair decision, while it plans to expand considerably its mid and long-term deliveries of gas to Southeastern Europe. Through its state company, Socar, it has achieved bilateral memorandums with Greece and Bulgaria that allow for gas exports to begin even before the commercial start of the Southern Corridor route, while it bids for the DESFA network manager in the Greek privatization and it has shown interest for investing in Albania and Serbia as well.

An estimation based on credible information is that the final selection may be delayed slightly and possibly be finalized a few weeks after its June deadline. There are two reasons for that. One is the immense material concerning the binding offers by TAP and Nabucco that need to be digested, analyzed and decided upon by the Shah Deniz Consortium. The second reason is the lobbying efforts at hand that will accelerate and possibly force a small delay before all stakeholders have a significant and crystal-clear view on the criteria upon which the selection will be made.

Apart from the various member states and the EU itself, as it was mentioned above, the governments of Azerbaijan, Turkey and even the US will play a role either directly or indirectly, a parameter which certainly calls for a thorough reflection upon the selection resulting in an eventual delay of some sort.