Southern Gas Corridor Advisory Council Meets; Fears and Hopes

The first meeting of the Advisory Council of the Southern Gas Corridor was held in in Baku on February 12th with participation of the ministers of partner countries, including Azerbaijan, Georgia, Turkey, Greece, Albania, Bulgaria, Italy as well as the Vice-President of European Commission for Energy Maroš Šefčovič.

The Southern Gas Corridor includes the South Caucasus Pipeline (Azerbaijan-Georgia), the Trans Anatolian Pipeline (Turkey) and the Trans Adriatic Pipeline (Greece, Albania, Italy).

Bulgaria also took part in the meeting because Trans Adriatic Pipeline (TAP) can provide a new source of gas to this country by linking to the planned Interconnector Greece Bulgaria (IGB) pipeline.

The first meeting of the Advisory Council of the Southern Gas Corridor was closed to media.

Greece's Position Shifts

Media reports from Greece citing the sources from the Energy Ministry indicate that Athens will seek a stake for Greece in TAP, annual transit fees and a reduction in the cost of natural gas imported from Azerbaijan.

Energy Minister Panayiotis Lafazanis was to take the opportunity of the meeting to talk to Azeri President Ilham Aliyev as well as top officials in the TAP consortium to express the new Greek government’s position

“Lafazanis will also discuss the issue of gas network operator DESFA, after the government stated in Parliament that it disagrees with the sale of DESFA to Azeri state company SOCAR”, wrote Kathermiri.

Sources said that Athens is in favor of the sale of a 49 percent stake in DESFA, and not the 66 percent previously agreed.

Azeri media did not report any details of Aliyev and Samaras’s one-to-one meeting, only mentioning that the parties discussed energy cooperation and the implementation of the Southern Gas Corridor project.

On the other hand, a day before staring the meeting of the Advisory Council of the Southern Gas Corridor, Greek Foreign Minister Nikos Kotzias met with its Russian counterpart in Moscow, a country that tries to keep its monopoly in exporting gas from Caspian littoral states towards EU.

After the meeting, Lavrov mentioned that he had discussed the new Turkish Stream natural gas pipeline with his Greek counterpart. "We discussed bilateral cooperation in the field of energy, taking into account the interest shown by the Greek government in plans to build a gas pipeline from Russia to Turkey and to the Greek border. We believe that this project has very good prospects".

Hopes around South Gas Corridor

Among the participants of meeting of the Advisory Council of the Southern Gas Corridor, the representations of International Finance Corporation, European Bank for Reconstruction and Development, the International Monetary Fund as well as European Investment Bank.

EU’s financial bodies planned to invest $5.8 billion in several European energy projects in next several years and with gaining EU’s strong support, the Southern Gas Corridor could become one of these projects.

European Commission Vice-President for Energy Union Šefčovič told Azeri Press Agency (APA) on February 11th that “Azerbaijan is today one of the EU's major and most reliable energy partners, and this contributes to our mutual economy and energy security”.

Referring to Southern Gas Corridor, he said that can improve energy security and create over 30,000 jobs in all countries along the Corridor. “Our objective remains that the entire infrastructure project along the corridor will be operational in time by 2019/2020”.

It is planned that 6 billion cubic meters per annum (bcm/a) of Azerbaijan’s gas, produced from the second stage of the Shah Deniz project be delivered to Turkey by 2019 and 10 bcm/a to be supplied to Europe by 2020.

Ilham Shaban is Director of the Azerbaijan Centre for Oil Studies, in Baku.