Caspian Report - Issue: 07 - Spring 2014

duced the share of Russian gas from
36.6% to 18.8% 6 over the same
period and will require the Caspian
volumes to replace its declining production,
tipped to decrease by 10%
annually as well, as find substitutes
for the Russian, Algerian and Libyan
contracts that are expected to expire
within the next decade.
In a nutshell, the Southern Gas Corridor
is not only physically deliverable,
but also has the potential to reach
deep into the economies of its target
area.
Critics, however, have pointed out
that the previously proposed transit
route – Nabucco West - a 1,300 km
pipeline that would have carried the
gas from the Turkish border to Austria
via Bulgaria, Romania and Hungary
- would have made a greater
contribution to supply diversification
in Eastern Europe, which remains
overwhelmingly dependent
on Russian gas. 7 The consortium
In a nutshell, the Southern Gas Corridor
is not only physically deliverable, but also
has the potential to reach deep into the
economies of its target area.
operating Shah Deniz rejected the
project last year in favour of TAP. A
frequently quoted justification for
the decision is the cheaper cost of
TAP. 8
In reality, others have said, the
choice of TAP over Nabucco West
delivered a resounding victory to
Moscow, as Russia will now seek to
forge ahead with the construction of
its 63 bcm/year rival South Stream,
a pipeline designed to reach out to
both Central and South Eastern Europe.
Consequently, argue proponents
of this view, Europe has failed
in its bid to diversify away from Russian
gas and build infrastructure
that would have been instrumental
in its drive to integrate the eastern
flank. 9
35
CASPIAN REPORT, SPRING 2014
The construction
of TANAP project
will kick off by early
2015.
6.
Ibid.
7.
Abbasov, S., (19 July 2013), “Azerbaijan: When it Comes to Pipelines, It’s Not Personal, It’s Strictly
Business,” Eurasianet.org
8.
Ibid.
9.
Dempsey, J., (1 July 2013), “Victory for Russia as the EU’s Nabucco Gas Project Collapses,”