Commentary: Southern Gas Corridor can boost regional stability

By Georgios Papanikolaou, Elena Sgarbi and Ferhat Alkan

Some leaders fear change. Others embrace it. Global energy markets have historically brought friction between states, but our countries have embraced the opportunity to leverage new fuel sources into greater geostrategic cooperation. Energy markets, it turns out, can create powerful shared interests and enhance regional stability.

The $40 billion Southern Gas Corridor project is a priority for the EU. Running through Turkey, Greece and Italy, the SGC will deliver gas directly from the Caspian Sea to Europe via Turkey, and it has strengthened our political and diplomatic ties to each other and the other three countries involved in ways that were unimaginable just a decade ago.

The SGC is not one single pipeline, but a series of three pipelines – the South Caucasus Pipeline, the Trans-Anatolian Pipeline (TANAP) and the Trans-Adriatic Pipeline (TAP). It traverses more than 2,000 miles through six countries. And it is entirely dependent upon our governments doing their part to ensure that the pipelines are completed safely and on time, and on the stability of our political and diplomatic ties.

The natural gas flowing from east to west will begin in Azerbaijan, which is already responsible for about 15 percent of Turkey’s natural gas demand and was Italy’s largest oil supplier last year. Greece, too, has been importing 0.75 billion cubic meters (bcma) of Azeri gas via Turkey since 2007. Those gas deliveries were the first ever to reach EU markets and EU territory straight from Azerbaijan.

Over the past decade, our experience with Azerbaijan as an energy exporter has been overwhelmingly positive. The SGC will bring us closer to Azerbaijan and each other. And it will dramatically change the role our countries play in the global energy market.

The SGC’s plan calls for the existing South Caucasus Pipeline running between Azerbaijan and Turkey to be connected to a new pipeline – TANAP – being constructed entirely in Turkey. Once completed, it will bring an initial 6 bcma per year for the Turkish domestic market and send an additional 10 bcma westward toward Greece and Italy through another pipeline project underway, known as TAP.

Eventually, the pipelines will carry twice as much fuel as they will on Day One. But gas deliveries can’t start soon enough. Energy experts are predicting that Europe’s appetite for natural gas will only grow in the coming years. And Turkey, which imports almost three-quarters of its energy and places second only to China in terms of natural gas and electricity demand increase over the last decade, is expected to see its domestic needs reach 59 bcma by 2020.

Our governments will use the SGC to support domestic demand. Secondarily, we are each committed to broadening the base of supply of natural gas for an increasingly interconnected global energy market. Transforming ourselves into critical transit hubs is a significant portion of our vision for how the SGC will benefit our countries. Both the TANAP and TAP portions of the SGC are designed to allow for connections and the construction of additional branches and interconnections. Some of them are already under construction or otherwise in-use.

The SGC will also make short and long-term contributions to the economies of the countries involved. The pipelines have brought billions in foreign direct investment and put thousands of people to work. Turkey will benefit from nearly $10 billion in direct investment and more than 15,000 people will be directly or indirectly employed in the construction support services, pipe manufacturing and other areas of the TANAP project. In Greece, officials will send at least 2,000 people to build the pipeline. Another 10,000 collateral jobs will be created throughout the country once TAP comes on line, and direct investment should total $2.04 billion. And in Italy, construction related to TAP will create permanent employment for the lifetime of the pipeline while providing 10-12 percent of domestic gas supplies.

Ultimately, the SGC pipelines represent a strong vote of confidence in our governments and a framework to promote cooperation. They have had the support of our governments and our people through changes in leadership and shifting markets. Caspian energy is an integral part of the diversified energy portfolios that are so sought after, particularly in Europe. The SGC is the means to deliver it. And, hopefully, a representation of how multilateral cooperation can alter the course of nations and entire continents.

Georgios Papanikolaou is the Consul of Greece to Houston; Elena Sgarbi is the Consul General of Italy to Houston; and Ferhat Alkan is the Consul General of the Republic of Turkey to Houston.

A conference on the Southern Gas Corridor is set for Monday in Houston.