04
Jan
2021

Azerbaijani gas flows into Europe via TAP, TurkStream begins Serbia supplies

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The start of 2021 has seen the arrival in Europe of natural gas from Azerbaijan’s giant Shah Deniz gas field in the Caspian Sea and also the start of Russian gas being delivered to Serbia via the TurkStream pipeline. The new pipelines create a new logistical dynamic for gas supplies to south-east Europe that will likely be supplemented with deliveries of LNG cargoes to the region through the new Krk Island LNG terminal in Croatia and eventually a new floating terminal at Alexandropoulos in northern Greece.

The State Oil Company of Azerbaijan Republic (Socar) said in a statement on New Year’s Eve that commercial quantities of Azerbaijani gas had arrived in Italy via the recently completed Trans Adriatic Pipeline (TAP), the third infrastructural component of the 3,500 km Southern Gas Corridor (SGC) that stretches from the Caspian, through the Caucasus, Turkey, Greece and Albania to southern Italy.

Socar and its partners, mainly BP, took a final investment decision seven years ago to expand production capacity of Shah Deniz to 26 Bcm/year and build the pipeline system, which has called for an investment of some USD 40 billion. TAP has a 10 Bcm/year capacity that can be doubled. Current throughput allocations allow for 1 Bcm/year to Bulgaria, 1 Bcm/year to Greece and 8 Bcm/year to Italy.

TAP connects with Italy’s gas transmission system operator SNAM Rete Gas at the Melendugno interconnection point and with Greece’s DESFA at Nea Mesimvria from where gas is transferred into Bulgaria. Azerbaijani gas first entered the pipeline in mid-November last year.

In the statement, Socar president Rovnag Abdullayev celebrated the milestone, saying: “Coming from a new source through an alternative route, [Azerbaijani gas] will contribute to European energy security. We anticipate a growing demand for additional gas volumes on the European market due to the constant local production decline. Our gas will fill this gas for decades to come, and the importance of cooperation between the Old Continent and Azerbaijan will increase.”

Bear hug

Russia, meanwhile, has sought to maintain its gas markets in south-east Europe with the construction of the TurkStream pipeline across the Black Sea with a landfall in western Turkey. TurkStream has so far managed to avoid the EU obstacles that its earlier-planned South Stream project encountered. From Thrace in Turkey, the second string of TurkStream crosses into Bulgaria and transported by Bulgartransgaz to Serbia on its way to Hungary.

Russia’s Gazprom announced on New Year’s Day that deliveries to Serbia, as well as Bosnia Herzegovina, had begun through the expansion of existing pipelines and the construction of new infrastructure by Bulgartransgaz and Serbian construction company GASTRANS d.o.o. Novi Sad. TurkStream is a “state-of-the-art, efficient and reliable gas pipeline that is in high demand by European customers,” Gazprom said.

TurkStream was built by Russia in order to close gas pipelines that run to Europe through Ukraine, which has proved a troublesome economic and political problem for Moscow. Six European countries now receive Russian gas through the TurkStream extension: Serbia, Bosnia Herzegovina, Bulgaria, Romania, Greece and North Macedonia.

Along with Russia’s 110 Bcm/year Nord Stream pipelines through the Baltic, TurkStream is designed to provide Gazprom with the means to deliver gas to its prime European customers and by-step contentious neighbours such as Ukraine, Poland and the Baltic states. The two strings of TurkStream have a combined capacity of 31.5 Bcm/year, with the first string delivering up to 15.75 Bcm/year to Turkey.

Gazprom’s exports to non-CIS countries during 2020 amounted to 179.3 Bcm, according to media reports, down from 199.2 Bcm/year in 2019. The data covers shipments to EU members, Turkey and China, which received some 4.1 Bcm through the Power of Siberia pipeline.

The company’s total natural gas production reached 452.7 Bcm during 2020, down from 500.3 Bcm during the previous year, according to data published in the media.

Diversification drive

Stoppages in the supply of Russian gas to Europe in 2006 and 2009 due to disagreements with Ukraine prompted the EU to seek greater diversity in gas supply to avoid over-reliance on Russia, hence the SGC and other pipeline and LNG terminal projects throughout eastern Europe designed to connect EU members and boost energy security for the entire body.

The new year has also brought the start of operations of LNG Croatia, the FSRU terminal established at Croatia’s Krk Island. The first commercial LNG cargo arrived at the EUR 233.6 million state-owned facility on 1 January. The FSRU has a 2.6 Bcm/year capacity, which is already booked for the next three years and 84% afterward until 2027.

LNG Croatia will provide gas to Croatia’s own gas network and supply gas to other EU members Slovenia, Italy and Hungary, as well as Serbia and Montenegro.

Meanwhile, Greece’s Gastrade is working on the installation of an FSRU at Alexandroupolis in the northern Aegean that will also supply countries in the region by linking into the TAP pipeline. The terminal is due to begin operations in early 2023 and will likely supply gas to Bulgaria and other Balkan states, ultimately contributing to EU objectives to increase energy security and supply diversification. - GL

Contact the editor:

Sebastian Kennedy
[email protected]

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