• 2 hours UK Offers North Sea Oil Producers Tax Relief To Boost Investment
  • 4 hours Iraq Wants To Build Gas Pipeline To Kuwait In Blow To Shell
  • 6 hours Trader Trafigura Raises Share Of Oil Purchases From State Firms
  • 7 hours German Energy Group Uniper Rejects $9B Finnish Takeover Bid
  • 9 hours Total Could Lose Big If It Pulls Out Of South Pars Deal
  • 11 hours Dakota Watchdog Warns It Could Revoke Keystone XL Approval
  • 1 day Oil Prices Rise After API Reports Major Crude Draw
  • 1 day Citgo President And 5 VPs Arrested On Embezzlement Charges
  • 1 day Gazprom Speaks Out Against OPEC Production Cut Extension
  • 1 day Statoil Looks To Lighter Oil To Boost Profitability
  • 1 day Oil Billionaire Becomes Wind Energy’s Top Influencer
  • 1 day Transneft Warns Urals Oil Quality Reaching Critical Levels
  • 1 day Whitefish Energy Suspends Work In Puerto Rico
  • 1 day U.S. Authorities Arrest Two On Major Energy Corruption Scheme
  • 2 days Thanksgiving Gas Prices At 3-Year High
  • 2 days Iraq’s Giant Majnoon Oilfield Attracts Attention Of Supermajors
  • 2 days South Iraq Oil Exports Close To Record High To Offset Kirkuk Drop
  • 2 days Iraqi Forces Find Mass Graves In Oil Wells Near Kirkuk
  • 2 days Chevron Joint Venture Signs $1.7B Oil, Gas Deal In Nigeria
  • 2 days Iraq Steps In To Offset Falling Venezuela Oil Production
  • 2 days ConocoPhillips Sets Price Ceiling For New Projects
  • 5 days Shell Oil Trading Head Steps Down After 29 Years
  • 5 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 5 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 5 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 5 days Venezuela Officially In Default
  • 5 days Iran Prepares To Export LNG To Boost Trade Relations
  • 5 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 6 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 6 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 6 days Rosneft Announces Completion Of World’s Longest Well
  • 6 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 6 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 6 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 6 days Santos Admits It Rejected $7.2B Takeover Bid
  • 7 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 7 days Africa’s Richest Woman Fired From Sonangol
  • 7 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 7 days Russian Hackers Target British Energy Industry
  • 7 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
Alt Text

What Is Putin Planning For Ukraine?

Despite a 2015 ceasefire, conflict…

Global Risk Insights

Global Risk Insights

GlobalRiskInsights.com provides the web’s best political risk analysis for businesses and investors. Our contributors are some of the brightest minds in economics, politics, finance, and…

More Info

Trans-Adriatic Pipeline Enhances European Energy Security

Trans-Adriatic Pipeline Enhances European Energy Security

Those concerned with European energy are excited for the arrival of finalized plans for the Southern Gas Corridor that will carry natural gas from Azerbaijan, through Turkey, Albania, Greece to Italy. The Trans-Adriatic Pipeline (TAP), a project of Norwegian Statoil, Swiss Axpo and German E.ON Ruhrgas is due for completion in 2019 and lauded as a way to reduce Europe’s dependency on Russian reserves. As European demand for energy grows, many Europeans fear falling vulnerable to Russian supply manipulations will have negative economic and political implications in the future.

A wide variety of energy security concerns, however, underscore the need for the TAP. The fear of falling vulnerable to Russian supply manipulation is the main worry, however rapidly increasing global demand, competition for energy resources, chronic instability in the energy producing Middle East and an emerging need to diversify energy use to address climate change all factor into Europe’s emphasis on energy security.

Russia currently accounts for 23 percent of Europe’s gas supply, however with Europe’s natural gas consumption projected to grow almost 20 percent by 2020, the E.U. is aggressively pursuing ways to diversify its gas supply.

Related article: Welcome the New Trans-Adriatic Pipeline Consortium

Russia has naturally sought to protect its privileged role as a major provider of energy by raising concerns over the construction of pipelines out of Central Asia, and co-opting European and Central Asian companies for alternative pipeline plans. In a major breakthrough, however, Azerbaijan appears to have resisted Russian efforts to stifle gas movement out of the Caspian Sea.

The pipeline is initially expected to carry 10 billion cubic meters (bcm) with plans to expand supply to 20 bcm. While this provides Europe only a small fraction of overall supply, the TAP’s real significance has more to do with the fact that gas from the Caspian Sea is now available independently of Russia’s Gazprom.

This Southern Corridor is designed to account for future gas supplies in Azerbaijan and Turkmenistan. As supplies increase, prices will be dictated more so by market principles than Gazprom’s monopoly. In addition, countries hosting the TAP, including Turkey, Greece, and Albania, are expected to benefit from the pipeline.

Greece will receive an estimated 1.5 billion EUR and create an estimated 2,700 jobs from construction of the TAP alone. Yorgo K?rbaki of Turkey’s Hürriyet newspaper reported in late June that in the next 50 years, Greece is expected to earn around 35 billion EUR, including 5 billion in net profit, from the project.

The other winners, of course, include the South Caucuses. By anchoring Azerbaijan to the European community, the TAP could help to stabilize a region facing major security concerns and governance failures.

Russia’s occupation of two “independent” enclaves in Georgia heightens regional tensions, and the political leaders in Azerbaijan and Armenia remain unflinchingly autocratic. Stronger ties with Europe, however, could result in positive change. The E.U. has much to offer the region in exchange for political and economic reform.

Related article: Trucks, Trains, or Pipelines – The Best Way to Transport Petroleum

Moreover, the TAP will arguably benefit the region’s most important geostrategic power: Turkey. In addition to the expected $8 billion in investments to local companies the TAP is expected to provide, the influx of natural gas is bound to wean Turkey away from its energy dependence on Russia and Iran, while strengthening its already solid ties with Europe.

A Turkey less connected to Russia and Iran is better positioned to serve as an essential Western ally moving forward. Cheaper gas as a result of the TAP will also cut into Turkey’s current account deficit, thereby facilitating its strong economic momentum.

TAP, in the long-term, could alter regional dynamics by diversifying European energy supplies, eroding Russia’s monopoly, stabilizing the South Caucuses and providing a boost to regional economies by way of investment and cheaper energy. The project should heavily benefit Europe, Turkey and the South Caucuses, leaving Russia to aggressively pursue alternative markets.

By. Eli Lovely




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News