ECONOMY

Energy market is a fine balancing act for Greece

Greece faces the risk of missing out on yet another opportunity for becoming a geopolitical hub in the energy transport market following the announcement by the consortium developing Azerbaijan?s Shah Deniz II gas field that it has selected the Trans Adriatic Pipeline (TAP) project for the route that would make landfall in Italy, instead of the Greek-Italian proposal for the Interconnector Turkey-Greece-Italy (ITGI) pipeline.

The Greek Public Gas Corporation (DEPA) and Italy?s Edison, which submitted the proposal for the ITGI, believe that the decision made by the Shah Deniz developers is not final and that their bid is still in play. The Greek government appears to be thinking along the same lines, even though it has been argued that even if the ITGI pipeline is not out of the running, Greece still has to make a move to involve itself in the TAP project. Failure to do so, according to experts, could push Greece out of the competition for the transportation of Azeri natural gas, which Europe considers vital in reducing its reliance on Russia. The TAP project includes the participation of Swiss company EGL, Norway?s Statoil and Germany?s E.ON Ruhrgas. The proposed pipeline would start in Komotini in northern Greece, cross Macedonia into Albania and from there continue underwater to Italy. However, there are no bilateral agreements in place in order for construction on TAP to begin, largely because of an ongoing dispute between Greece and Albania over the two countries? exclusive economic zones.

According to Thanos Dokos, director-general of the Hellenic Foundation for European and Foreign Policy (ELIAMEP), TAP could serve as a basis by which to redefine relations between Athens and Tirana, which both have a lot to gain from the construction of this pipeline. In any case, Dokos stresses, Greece should not appear to be wavering in its intention to be a part of the transport map for natural gas to Europe.

The timeline has already been drawn: The Shah Deniz consortium is currently examining the proposal for channeling the natural gas via Italy, a route which is given priority in the TAP project. It is also exploring an alternate possibility of transporting the Azeri natural gas directly to Central Europe, through the Baumgarten natural gas trading hub in Austria.

For this terminal, there are also two proposals for pipelines: Nabucco West, which is an abridged version of the original Nabucco proposal that effectively cuts out the Asian stretch of the pipeline and sees it starting in Edirne in western Turkey and going through Bulgaria, Romania and Hungary before reaching Austria. The second proposal is for the South East Europe Pipeline (SEEP), a somewhat vague project that would connect Turkey to Bulgaria and reach Hungary using existing infrastructure along the way where it is available.

The Shah Deniz consortium has until June to decide which of the two proposals for Central Europe it prefers and until mid-2013 to reach a final decision on whether Azeri natural gas will reach Europe through Italy or Austria.

In a study conducted by ELIAMEP on this issue, Professor Theodore Tsakiris notes that the ITGI project, which outlines a transport capacity of 10 billion cubic meters of natural gas per year, does not foresee the doubling of this amount, which is a target set by the Shah Deniz developers for the start of 2020.

In a recent interview with Kathimerini, the Azeri ambassador to Greece, Rahman Mustafayev, denied rumors that the ITGI was rejected in part because of the economic instability in Greece, saying that the TAP pipeline would also have to pass through Greece as well. He also said that the TAP project is an opportunity for Greece to make a dynamic debut on the energy map by attracting a large investment, which would improve investor trust in the country, offer numerous jobs and bolster the country?s geostrategic position.