Wary of Russian gas, EU pushes TBP, Vertical Corridor

EPA/ROMAN PILIPEY

An employee at an underground gas storage facility near Poltava, Ukraine, July 15, 2016. A MoU was signed by the TSOs from Ukraine, Romania, Bulgaria and Greece on reverse flows on the Trans Balkan Pipeline on September 9, 2016.

Russia has said it will abandon Ukrainian gas transit in 2019 while the EU is looking for ways to protect its member states and Kiev


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European Commission Vice-President for Energy Union Maroš Šefčovič, Climate Action and Energy Commissioner Miguel Arias Cañete and Energy Ministers from 12 EU and Energy Community countries and contracting parties in Central and Southeastern Europe have discussed cooperation under the European Commission Initiative on Central and South-Eastern European Gas Connectivity (CESEC), launched in 2015.

At a meeting in Budapest on September 9, the Bulgaria–Romania–Hungary–Austria (BRUA) Connecting Europe Facility Grant agreement of €179 million was signed.

In addition, Governments and Transmission System Operators (TSOs) from Greece, Bulgaria, Romania and Hungary signed joint statements on cooperation on gas projects along the so-called Vertical Corridor.

Furthermore a Memorandum of Understanding was signed by the TSOs from Ukraine, Romania, Bulgaria and Greece on reverse flows on the Trans Balkan Pipeline (TBP).

Constantinos Filis, director of research at Institute of International Relations, told New Europe on September 15 Russia has said it will abandon Ukraine’s gas transmission system (GTS) to Europe in 2019. “Therefore, the EU is looking for ways to protect its members – particularly in Southeast Europe – and Kiev, in which it is investing politically and economically, through reverse flow pipelines,” Filis said.

He noted that Moscow also claims that it will use a new system, through Turkey, rather than the TBP to supply Southeast Europe. “Although it still seems to me that energy is part of a wider geopolitical game between the EU and Russia, including finding a solution on Ukraine that satisfies everyone, all sides are preparing their alternatives. The key is who will supply the routes,” Filis said.

“As the situation stands now, we run the risk of the following paradox: buying Russian gas through Nord Stream and Yamal and then feeding Southeast Europe through the TBP and Ukraine through Slovakia. This is why the Southern Gas Corridor and the Vertical Corridor are important, especially for Southeast and Eastern Europe,” Filis said.

Hellenic Gas Transmission System Operator DESFA said in an emailed press release on September 13 its executive chairman, Sotiris Nikas, signed the joint statement between DESFA, Bulgartransgaz, Romania’s Transgaz, Hungary’s FGSZ and company ICGB on the Vertical Corridor. Nikas also signed the MoU on the TBP.

Greece can play the role of distributor, provided that substantial amounts of natural gas will be transiting its territory through the Trans Adriatic Pipeline (TAP), floating liquefied natural gas (FLNG) in Alexandroupolis and other projects, Filis told New Europe. Then, the Vertical Corridor, using the Interconnector Greece Bulgaria (IGB), can reach up to Hungary, he said, adding that here is certainly room for cooperation with East Mediterranean gas as well as for liquefied natural gas (LNG), be it American or of any other origin.

Reasonably enough, the EU would like to avoid using Gazprom’s Turkish Stream pipeline, as it will carry Russian natural gas, Filis said. “But again, given the fluid situation, we might see a compromise between Brussels-Moscow-Kiev that will change the course of events, or Turkish Stream supplying solely the Turkish market, or IGB not making it up to Hungary if it lacks the necessary quantities. It won’t be the first time that an agreement on paper has not been fulfilled,” he said.

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