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No Risk for SGC from Revival of South Stream: Expert

The revival of the Russian-initiated South Stream gas pipeline project poses no risk to the Southern Gas Corridor project, which envisages delivery of Azerbaijani gas to Europe, Charles Ellinas, CEO of Cyprus-based energy consultancy e-CNHC told Trend.

“All agreements on the Southern Gas Corridor are in place, gas sales are secure, the final investment decision (FID) has been reached and construction is on schedule – so the project is going ahead,” said the expert.

Ellinas noted that it remains to be seen how and if the possibility of reviving the South Stream project turns into reality.

“The US is considering applying sanctions on Russian pipelines, but already Germany and Austria responded quite strongly against this, asking the US not to interfere in EU’s energy matters,” reminded the expert.

Earlier, Austrian Der Standard newspaper reported that Austrian energy group OMV and Russia’s Gazprom are considering reviving a gas pipeline project through the Black Sea connecting Russia to central and southern Europe.

However, answering Trend’s question regarding the reported talks, OMV said “we do not comment market rumors in general”.

In December 2014, Russia abandoned the South Stream project in favor of Turkish Stream, which envisages construction of a gas pipeline from Russia to Turkey through the Black Sea.

Russia and Turkey signed an intergovernmental agreement on the construction of two offshore strings of the Turkish Stream gas pipeline in October 2016. Each string is estimated to have an annual capacity of 15.75 billion cubic meters of natural gas. The first string will supply gas directly to Turkey, while the second is to be used to deliver gas to European countries through Turkey. Initially, Russia and Turkey planned to build four strings of the pipeline.

The Southern Gas Corridor envisages the transportation of gas from the Caspian Sea region to the European countries through Georgia and Turkey.

At the initial stage, the gas to be produced as part of the Stage 2 of development of Azerbaijan’s Shah Deniz field is considered as the main source for the Southern Gas Corridor project. Other sources can also connect to this project at a later stage.

As part of the Stage 2 of the Shah Deniz development, the gas will be exported to Turkey and European markets by expanding the South Caucasus Pipeline and the construction of Trans-Anatolian Natural Gas Pipeline (TANAP) and Trans-Adriatic Pipeline (TAP).