Caspian Report - Issue: 07 - Spring 2014

and possibly further to Europe, although
neither party has yet made
official statements in this regard.
The price of any additional volumes
reaching Turkey and Europe will
have to be responsive to demand
and supply rather than follow rigid
oil-indexed formulae.
respond to the needs of both buyers
and sellers will hinge on a crucial factor
– its political invulnerability.
Politically invulnerable
Aura Sabadus
42
In the light of the two challenges
looming on the horizon – greater
competition from global LNG and
regional supplies as well as uncertainty
regarding the oil indexation,
a hub rather than an oil-indexed
price will be beneficial to both buyers
and sellers. A competitive market
price will enhance economic
efficiency in the target and neighbouring
countries. In this context,
Turkey’s role in creating a liberalised
traded gas market will take
centre stage.
Turkey is the only country in the region
that has the size, demand and
proximity to three quarters of the
world’s conventional hydrocarbon
reserves to establish a liquid hub
similar to those seen in the UK or
the Netherlands. The creation of a
traded gas market in Turkey would
have a domino effect on neighbouring
South East European countries
where the liberalisation process has
so far failed.
Nevertheless, the establishment of
an effective Southern Gas Corridor
that can accommodate along its already
pledged Caspian gas, volumes
from neighbouring regions at competitive
market-driven prices that
Turkey is the only country in the region that has
the size, demand and proximity to three quarters
of the world’s conventional hydrocarbon reserves
to establish a liquid hub similar to those
seen in the UK or the Netherlands.
To what extent will the Southern
Gas Corridor prove a reliable supply
route for Turkey and Europe, unencumbered
by political jostling as
recently seen between Russia and
Ukraine What guarantees does it
bring that end consumers will not
suffer from politically induced interruptions
that could leave them out in
the cold, literally After all, the transport
of Caspian and possibly Iraqi
or Israeli gas to Europe via Turkey
will happen in an already politically
sensitive environment fraught with
complex and simmering tensions.
Until the end of the Cold War, the
concept of insecurity was typically
associated with military threats as
states concentrated capabilities to
protect their sovereignty. However,
after 1990 and with the emergence
of a globalised world, the notion expanded
into new terrain, as states
sought security in diverse areas such
the economy, environment, energy.
Security can be defined as “freedom
from threats”. 18 Depending on the
18.
Waever, O., (1995), p. 52) “Securitisation and Desecuritisation” in On Security, ed. Ronnie Lipschutz (New York: Columbia
University Press)