The new gas gambit

The new gas gambit

Elisa Maria Giannetto
Share
The Southern Gas Corridor redraws the global gas map, pitting the interest of Russia and the USA against those of China, while Europe seeks a new balance

One month on from the Baku summit at which energy ministers reaffirmed the strategic importance of the Southern Gas Corridor (SGC), new alliances and rivalries are emerging. In particular, two blocs have begun to take form: on one side Russia and the United States, on the other China. Europe, finding itself in the middle of this tug-of-war, is now rethinking its energy strategy. By delivering natural gas from Azerbaijan, the Southern Gas Corridor is the European Commission’s best bet for diversifying and securing its energy supply and eliminating the danger of blackouts. China, observing the advances made in this project, is working to develop infrastructure of its own capable of transporting large quantities of gas from Turkmenistan, in direct competition with Europe for access to central Asia’s vast natural resources. The gas pipeline will stretch nearly 4,000 km, crossing seven countries and involving the participation of ten major gas companies, for a total investment of some $45 billion. The plan includes the second extraction phase of the Shah Deniz field, with the creation of wells and offshore gas production in the Caspian Sea, as well as construction of three gas pipelines: the South Caucasus Pipeline linking Azerbaijan and Georgia, the TANAP (Trans-Anatolian Pipeline) and the TAP (Trans-Adriatic Pipeline). The project has also received support from the United States, which from the outset has considered it an opportunity to reduce southeastern Europe’s reliance on Russian natural gas. But China’s play has drawn the USA and Russia closer, especially in light of Trump’s apparent intention to pursue a protectionist trade policy in his country’s dealings with the Asian giant. On another front, meanwhile, the EU is looking to the possibility of importing Iranian gas, transported on cargo ships as LNG (rather than via pipeline), thereby lowering costs and avoiding risks to European energy security.