Caspian gambit: how Turkmen gas will squeeze Russia in Europe

Gazprom is preparing to stop deliveries to Europe. Most likely, on January 1 of next year, transit will be stopped by Kiev. In order not to fall into the next fines, the Russian company will have to work at a loss this winter, but its management expects that everything will work out after that. However, this winter may mark the beginning of the end of Gazprom’s dominance in the European energy market. A dangerous competitor is already knocking on the door.

In Turkey, the Trans-Anatolian Gas Pipeline (TANAP) and the Trans-Adriatic Pipeline (TAP) are nearing completion at the end of the month. Azerbaijani gas is already supplied to Turkish consumers, and after completion of commissioning work at the beginning of next year, it will flow to southern Europe. How realistically can these projects squeeze Gazprom?

Local story?

Some Russian experts are reassuring by stating that the Trans-Anatolian pipeline is a "local story." But is it?

The throughput capacity of TANAP is 16 billion cubic meters of gas per year. Of these, 6 billion will be taken away immediately by the Turks, and only 10 billion cubic meters will go to the Europeans. Such a volume does not seem very serious as a competitor to Gazprom, but everything is somewhat more complicated. The following factors must be considered.

At firstThe gas pipeline’s capacity can be seriously increased: by 2023, to 23 billion cubic meters, and by 2026, to 31 billion. This will already be comparable with the Russian Turkish Stream. What is even more alarming, the project provides an opportunity to increase the throughput of TANAP to 60 billion cubic meters of gas, which exceeds the capacity of even Nord Stream-2.

SecondlyThere are serious questions about the resource base of the Trans-Anatolian gas pipeline. Azerbaijan alone will not pull such volumes. Baku is tightly contracted for supplies to Europe. The resources of its fields are not enough at the same time for export and to satisfy their own needs, so the former Soviet republic was forced to buy gas from the Russian Federation. The situation itself is strange, but such are the laws of the market. Azerbaijan does not want to get fines. It is this argument about the lack of a resource base that some domestic experts cite as reassurance. Unfortunately, they are silent about something.

Thirdlybesides Azerbaijan, theoretically Turkmenistan, Iraq, Iran and Kazakhstan will be able to use the pipeline that goes to Europe bypassing Russia. Turkmenistan is the most dangerous competitor to Gazprom. Ashgabat is able to export up to 40 billion cubic meters of gas to the European market. For this, the country's large fields were connected by the East-West gas pipeline with the Caspian coast. Previously, all problems rested on the unregulated status of the Caspian, the need for large investments in construction and the interest of Europe itself. However, now everything has changed for the worse for Russia.

Big problems?

A year ago, the Kremlin is very short-sighted, as it turns out, put an end to a long-standing dispute over the division of the Caspian Sea. Thus, he opened the way for the construction of the Trans-Caspian gas pipeline. Its capacity can reach up to 30 billion cubic meters annually. It is believed that the Russian side has protected itself from this project with reservations on the need to coordinate construction with all parties to the Caspian Convention, which says:

The route for laying submarine cables and pipelines is determined by agreement with the party through which the submarine cable or pipeline should be laid through the bottom sector.

This was motivated by the need to comply with environmental requirements. And all would be fine, but Gazprom in some way fell into this trap with the Nord Stream-2. Recall, Denmark pulled for two years with the issuance of a permit for its construction under the pretext of strict environmental requirements. The monopolist even intended to sue Copenhagen, but he recently issued a decision.

It turns out that taking care of the environment can be covered for quite some time, but not indefinitely. Moreover, the Kremlin will be under serious pressure from its “partners”. Interest in Turkmen gas is directly stated by major European officials. Ankara will also be drowned for the Trans-Caspian gas pipeline, judging by the words of President Erdogan:

We are making great efforts to ensure that Turkmen gas also becomes part of this project.

Will our “partners”, on whom the launch of the Turkish Stream and Nord Stream 2 directly depend, succeed in persuading the Kremlin to issue a pipe permit along the bottom of the Caspian? The question is rhetorical.
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  1. krasstar Offline
    krasstar (Igor) 19 November 2019 18: 55
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    Any inflow of gas outside Gazprom to Europe should be accompanied by a reduction in gas supplies from Russia. The volume of reduction in supplies should be exactly the amount that Europe intends to receive from "independent" sources by the deadlines designated by Europe itself. If they want 40 billion cubic meters of gas from Ashgabat in 2026, you will receive a reduction in deliveries from Russia by the same volume already in 2020. Tired of listening to how Russia will be strangled by such-and-such a deadline ....
  2. Oyo Sarkazmi Offline
    Oyo Sarkazmi (Oyo Sarkazmi) 19 November 2019 22: 23
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    Firstly, while 16 billion cubic meters is not today.
    Secondly, Azerbaijan built a pipe at its own expense, taking loans. That is, in the coming years, Azerbaijan will give gas for free - for loans. Therefore, the second thread is not soon.
    Thirdly, the connection of Turkmenistan is a big question. Turkmens do not want to pay for construction abroad, or even pay for transit abroad. Buy gas at the border - and do what you want!
    In general, until they lift the sanctions from Iran and return the money stolen from Iran 40 years ago, more than 10-15 billion cubic meters can not be seen in Europe.
    1. Marzhecki Offline
      Marzhecki (Sergei) 20 November 2019 07: 48
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      This is called complacency.
      1. A.Lex Offline
        A.Lex (Secret information) 20 November 2019 12: 04
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        How critical is gas supply to the EU for the Russian economy?
      2. Anatoly Unknown Offline
        Anatoly Unknown (Anatoly Unknown) 20 November 2019 21: 55
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        No, this is called a blow under the breath for your lack of professionalism.
      3. Oyo Sarkazmi Offline
        Oyo Sarkazmi (Oyo Sarkazmi) 26 November 2019 21: 05
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        In the next 20 years, neither Qatar, nor Iran, nor Turkmenistan will compete with Russia. Algeria and Libya - pull close, there is already one thread. As they make peace, they can dramatically increase supplies. Once in 5. But even then - Europeans do not want to invest in intra-European logistics. Each country is for itself.
  3. EXPrompt Offline
    EXPrompt (EXPrompt) 20 November 2019 10: 46
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    The rate of gas supplies to Europe.
    2018 year. Gazprom 194 billion cubic meters, 2,5 US LNG.
    2019 Gazprom 200,8 US - 3,7.
    YOU than decided to scare Gazprom?
    TAP-TANAP with their 10 billion cubic meters? They can increase to 60 - it’s very funny, but will Shah Deniz 2 pull them out?
    With the same success, you can scare Gazprom with the great construction of the century Baltic Pipe, exactly the same pipeline for 10 billion cubic meters. Norwegian gas.
    All this is not serious, like the US LNG, a lot of talk, little use.
    1. A.Lex Offline
      A.Lex (Secret information) 20 November 2019 12: 07
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      As far as I heard, the Norwegians are running out of stocks and reducing sales in the rest of the EU (otherwise why would they be so excited about the Russian territory of the Arctic and about the creeps to the allies because of the measures to divide the Russian Arctic?) ...
  4. gorenina91 Offline
    gorenina91 (Irina) 20 November 2019 17: 25
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    Firstly, the gas pipeline’s capacity can be seriously increased: up to 2023 billion cubic meters by 23, and up to 2026 billion by 31. This will already be comparable with the Russian Turkish Stream. Even more alarming, the project provides for the possibility to increase the TANAP throughput to 60 billion cubic meters of gas, which exceeds the capacity of even Nord Stream-2. "

    "Thirdly, in addition to Azerbaijan, Turkmenistan, Iraq, Iran and Kazakhstan will theoretically be able to use the pipeline that goes to Europe bypassing Russia. Turkmenistan seems to be the most dangerous competitor to Gazprom. Ashgabat is able to export up to 40 billion cubic meters of gas to the European market. For this, the country's large fields were connected by the East-West gas pipeline with the Caspian coast. "

    - Fine, just fine ... if this happens ... -If it wouldn’t break loose ... - But maybe it will break ... - these states simply can backtrack and abandon their "ideas". ..
    - The fact that Gazprom crawled into an impassable gas deadlock ... is already obvious ... Ahead are sheer losses and complete collapse ...
    - It’s not even possible to recoup the costs of creating all this gigantic, many-thousand-kilometer pile-up of a ridiculous network of gas pipelines that piled stupid Gazprom ... - Russian taxpayers will have to puff off everything (as always) ...
    - And then unprecedented luck ... - Gazprom has "followers" of its absurd acts ... - And at least some of the severity and destructiveness (and quite significant) of these utopian aspirations, these "followers" are ready to shift to themselves ... - And this can somehow alleviate the fate of Gazprom ...
    - Who is there ... - Turkmenistan is numbing, everything wants to get rich ... -Hahah ... - There is not enough China for her, who uses it as she wants ... - But Turkmenistan has remained only with what it started all its "commercial" gas affairs with China ... - And with deliveries to Europe, Turkmenistan will be much more tragic ... -And for Kazakhstan, if he gets into this gas pipeline adventure ... - everything will also be unprofitable ...
    - Azerbaijan will not burn out anything ... - He has already finally finally begun to "understand" what this whole gas pipeline scam is ...
    - And it’s time for everyone to understand that ... what ... what ... what ... that all these gas pipelines ... this is the real "gas pyramid" (about the same as the financial pyramid). .. - only gas recipients win and share all the benefits according to their "ranks" ...
    - And all gas exporters remain "at the bottom" of the pyramid ... -That may be added to the "bottom-up participants" ... - But they can just change their minds and Gazprom will remain in "proud isolation" ...
  5. oracul Offline
    oracul (leonid) 21 November 2019 08: 31
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    There is nothing eternal in life, everything flows - everything changes. Especially in a market economy. The uneven development of capitalism was noted by Lenin. And the fact that we will supply gas to China is good for us. Gazprom will reduce supplies to Europe? Well, okay. Himself will remain more. The resource is not eternal.