EU Ready To Consider Iran Joining Southern Gas Corridor

By Irina Slav, Oilprice.com

The European Union is ready to start negotiating Iran’s participation in the Southern Gas Corridor project, the EU’s Vice President for Energy Union Maros Sefcovic told media at the Fourth Ministerial Meeting of the Southern Gas Corridor Advisory Council.

The Southern Gas Corridor is a project of strategic importance for the EU, as it will reduce its dependence on Russian gas by eventually replacing part of it with Azeri gas from the Shah Deniz field in the Caspian Sea.

The project will build on the existing South Caucasus Pipeline, which will be expanded and extended into Turkey via the Trans Anatolian Pipeline. From Greece, the Caspian gas will flow to Italy via the Trans Adriatic Pipeline. Both TANAP and TAP have yet to be built.

But the Shah Deniz gas is just the beginning. From the start it has been made clear that other producers of the fuel are welcome to join the project, which will initially supply 10 billion cubic meters annually to the European Union. To compare, in 2016 Gazprom supplied 49.83 billion cubic meters to its single largest buyer in the EU, Germany. Iran is a logical addition given the size of its gas reserves.

The Southern Gas Corridor has not been without its problems. Progress on the Trans Adriatic Pipeline, its last leg, has been fraught with protests, for one. Earlier this month an environmental group, CEE Bankwatch, challenged the benefits of the projects, saying it may not actually reduce CO emissions in Europe.

In fact, CEE Bankwatch said, TAP’s overall environmental impact would be negative due to fugitive methane emissions and leaks. Methane is a very strong greenhouse gas, the group said. TAP itself said that the data used in the study does not match the data it uses and that it was not consulted on the study.

Despite the opposition, TAP recently received a US$1.86-billion (1.5-billion-euro) loan from the European Investment Bank. The first supplies of Caspian gas should start flowing into Europe in 2020.

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