Trans Anatolian Pipeline Project (TANAP) and its impact on Regional Cooperation and Energy Security of Georgia

By: Nika Chitadze. Director of the Center for International Studies

     Ketevan Jebisashvili. Research Fellow of the Center for International Studies    

Introduction

The energy factor has come to the world politics with the beginning of an industrial era. Before that people were fighting for territories (pastures and fields), or deposits and control over trade routes and so on. XX century has added to it the fight for energy resources carried on by means of all available economic, diplomatic and military ways. Aspiration for the control over energy resources has turned to the major factor of the world history.

After the collapse of USSR the new geopolitical realities have been created in the global  politics and especially in the post-soviet space. Together with the such positive event as disintegration the last totalitarian empire USSR, in the beginning of 1990s of the 20th century, at the same time  several political and interethnic conflicts have been emerged in the post-soviet space, first of all in the Black Sea/Caspian Region.

Geopolitical potential of the Black Sea/Caspian Region, located at the crossroads of Europe and Asia, is mainly determined by the fact that important trans-continental communication corridors lie across it, including the territory of Georgia. By this, competition in the Black Sea/Caspian Region grounds on prospect estimations of the Caspian oil and gas scopes. And here it’s noteworthy that the states of the Black Sea/Caspian area evaluate noticeable growth of the scopes of Caspian gas production as serious and promising factor of assurance of their energy security. Black Sea/Caspian states act in the role of energy “bridge” to deliver Caspian hydrocarbons to Europe. To our mind exactly the node Pre-Caspian – Black Sea region is turning into the frame of new international relations, which are in the stage of formation, reserving a possibility of turn the two regions into a separate geopolitical area.

The issue of geopolitical configuration of forces in the Black Sea/Caspian Region, is greatly connected with the trend of foreign powers influencing on the processes, happening within its borders and out of their lines and with the establishment of a new exporting pipelines by-passing Russia in order to minimize the Moscow`s place and role in the region. And this is for purpose as according to industry data, Russia holds the place of the world leader in the issue of explored stocks of natural gas.

The wider Black Sea Region has become a new strategic frontier for Europe, Russia and the United States in terms of energy security, frozen and festering conflicts, trade links, migration, and other key policy areas. Prospects for the Black Sea/Caspian in the 21st century will be shaped by the interaction between major external actors, the ambitions of states and peoples in the region and the region’s role as a crossroads of civilizations.

There are three groups of basic interests, represented in the Black Sea/Caspian Region today. First, we have the interests of the West, divided quite explicitly between the US and the positions of the major continental European countries. Both Washington and the EU powers, partially with Turkey pursue strategies for change and transformation of the region around the Black Sea, motivated by different – only partially coinciding - policy agendas.

Second, the interests of post-Soviet Russia, which wants to be the leading power in the Black Sea/Caspian Region.

Third, we observe the interests of the smaller Black Sea countries (Ukraine included, even if its size does not correspond to the definition of a “small country”). Those smaller countries are quite diverse and challenged by different policy agendas. Bulgaria and Romania are NATO and EU members. Ukraine, Georgia and Moldova struggle – each country within its own environment – for independence from Russian neo-imperial grip, for national integration and successful reform and modernization.

Armenia is following its own strategic agenda, dominated by the Nagorno-Karabakh conflict with Azerbaijan and the effective blockade, imposed by Turkey on the grounds of several disputed bilateral problems, Karabakh included.

Azerbaijan – last but not least - is distantly present in the Black Sea/Caspian environment, both with intensifying transfer of Azerbaijan`s oil and gas across the Caucasus and the Black Sea (the BTC pipeline), and with its integral presence into the South Caucasus strategic balance and in the broader post-Soviet context.

In this regard, it is interesting to consider the foreign policy and national security priorities of Georgia in the context of energy security.

Georgia`s Energy Policy and “Energy Independence issue”

In order to ensure the Georgia`s energy security, the further diversification of energy sources and transportation routes represents the priority direction of the energy policy of Georgia. It is considered as an equally important to support the development and modernization of the country’s energy systems, as well as their integration into regional energy infrastructure. The further promotion of Georgia’s energy capacity will be positively reflected on the strengthening independence, providing state security, socio-economic development and increasing the standard of living of the citizens of Georgia. Strengthening the energy independence is a great necessity for the national security of Georgia. For the implementation of this goal, it is crucial to diversify the sources of energy¹. 

The importance of Georgia, as the transit country with the convenient geopolitical and geographic location has been increased, when in 1994 the “Century Contract” related to the producing and transportation to Europe the Caspian oil had been signed².  

The perspectives of the producing and transportation of the Caspian oil and gas and the possible role of Georgia, as an one of the “main player” within the East-West Transport corridor, not only attracted the attention of International Community toward this South Caucasus country, but created the more opportunities for the activation Georgia`s foreign policy.  

In Georgia, authorities, political parties of the different orientation and majority of the public opinion, during the consideration the future perspectives of Georgia, very often connects them with the producing the energy reserves of the Caspian Region and plans of their transportation via territory of Georgia. This issue is considered as an guarantee of the economic development, attraction of the foreign investments, creation of the job places and increasing the budgetary incomes, which in general will give the stimulus for the increasing the role of Georgia in the International economic relations.

Energy transit and Eurasian Corridor, is one of the main factor for the increasing the interests toward the Caucasus Region by the West. At the first years of the restoration of the independence of Georgia, the Europeans considered the issue – is Georgia a part of Europe? But at the modern times, due to the several economic, geopolitical etc. including energy factors, Georgia is one of the active member of the EU “Eastern Partnership” Program³.  

Taking into account the convenient geographic location, Georgia can get the economic and political benefits from the transit of the Caspian oil and gas, furthermore, the projects, related to the Caspian energy reserves, can become one of the key factor for the restoration of the territorial integrity of Georgia.     

Georgia's territory, which borders in the north with Russia, in the east with Azerbaijan and in the south with Armenia and Turkey, that share a south-eastern portion of its border with Iran, makes Georgia an attractive geopolitical-economic region, particularly since it is a country through which runs the Baku-Tbilisi-Ceyhan oil pipeline that flows from the Caspian Sea to Europe. Georgia also has easy access to the Black Sea ports. However, it is Georgia's military strategic importance which brings Georgia into greater focus and attraction geopolitically than its neighbors.

As it was mentioned above, in order to ensure sustainable energy security for Georgia, it is important to create a favorable investment environment, to strengthen international cooperation, and to further develop the existing energy infrastructure. Also, great importance is attached to the diversification of energy resources and suppliers, as well as to participation in international and regional energy projects. In this regard, Georgia welcomes the implementation of new projects in the framework of the South Energy Corridor, including those projects that will supply oil and natural gas from the Caspian and Central Asian regions through Georgia to Europe.

Georgia is a part of important energy corridors. Georgia is aware of its role in supplying the rest of the world with energy resources from the Caspian Sea and Central Asian regions via alternative routes. Georgia’s Black Sea ports, the Baku-Supsa and Baku-Tbilisi-Ceyhan oil pipelines, and the Baku-Tbilisi-Erzurum gas pipeline are already active and strategically important projects. Georgia is determined to ensure the effective functioning of these existing projects and to develop prospective new ones (first of all TANAP project).

Importance of the TANAP project

On June 12, 2018, the inauguration day of the starting the TANAP project was held. The Gas Southern corridor takes in to consideration the widening of the Baku-Tbilisi-Erzurum gas pipeline construction to the new pipeline – Trans Anatolian Pipeline till the Greek-Turkish border.  

In the framework of the new historic project, natural gas will be transported from Azerbaijan`s  gas field “Shah Deniz” toward Georgia, Turkey, Greece, Bulgaria, Albania and Italy.

The length of the pipeline is 3500 Km.

The cost of the southern corridor project is about 40 billion USD, from where $9,3 billion was spent to the Trans Anatolian Pipeline (TANAP), $6 billion – for Trans Adriatic Pipeline (TAP), and $23,8 billion for the second stage of exploration and exploitation activities of the “Shah Deniz” field.

At the same day, during the inauguration day, US Department of State spread the official declaration, that “USA fully supports the “Southern Gas corridor”, it realizes the importance of this project toward the diversification of the energy supply of Europe.   

Discussion about the project was included to the agenda on 17 November 2011 at the Third Black Sea Energy and Economic Forum, which was held in Istanbul. About one month later, Turkey and Azerbaijan signed a memorandum of understanding, related to the foundation a consortium to construct and operate the pipeline⁴. The construction was planned to start in 2014 and to be completed by 2018.

With regard to capacity of this gas pipeline, according to the experts it would contain about 16 billion cubic meters of natural gas per year with the perspective of the gas volume increasing up to 23 billion cubic meters by 2023, 31 billion cubic meters by 2026, and at the final stage 60 billion cubic meters with the possibilities the transportation of the additional volume of gas supplies from Azerbaijan (in case of the number of compressor stations are increased) and in long-term perspectives if Trans-Caspian Gas Pipeline enters into exploitation from Turkmenistan⁵. It is expected the pipeline  to be connected with Trans Adriatic Pipeline.

The role of TAP project for the Black Sea/Caspian and South-East Europe Regions

The Trans Adriatic Pipeline (TAP) will transport Caspian natural gas to Europe.

It is planned the connection of the Trans Anatolian Pipeline (TANAP) with the new pipeline at the Greek-Turkish border, from where TAP will be constructed on the territories of Northern Greece, Albania, the marine space of the Adriatic Sea before coming ashore in Southern Italy, where it will be connected with the Italian natural gas network.

TAP's initial capacity will be 10 billion cubic meters of gas per year⁶.  

The possible scenarios of the events development in the framework of the TANAP and TAP implementation process:

  Pessimistic scenario:

- - Russia will do its best, to implement the diversion acts on the energy objects of Georgia – electricity lines and in the worse situation on the pipelines. The terroristic acts on the energy infrastructure of Georgia will decrease the status of Georgia – as a transit country.    

 

Optimistic scenario:

- Starting the working over the TANAP and other energy projects will increase the interests of Europe toward Georgia, due to it, EU will be more interested in the stabilization in Georgia, for the further continuation of the projects, with the EU (and appropriate energy companies) participation; 

- The import of the natural gas via territory of Georgia, also other alternative to Russia projects, will decrease the energy dependence on Russia by Europe and will weaken the Russia from political and economic point of view;  

- In case, if in the future projects (similar to “Nabucco”) implementation process, together with Azerbaijan will be involved Turkmenistan and Kazakstan, accordingly, it will increase the volume of the natural gas transit via Georgia, particularly thought the gas pipeline Baku-Tbilisi-Erzurum. It will increase the status of Georgia, as a transit country and will bring the additional transit income for the country;  

- In case of not involvement the Central Asian states in the projects with participation of Georgia, it will be possible the involvement in the gas projects such states as Egypt, Iraq and in long-term perspectives even Iran (Transportation of natural gas to Turkey). Despite the fact, that Georgia will not be able to participapte at those projects as a transit country, the implementation of the alternative to Russian projects meet with the National Interests of Georgia, because Russian influence at the energy market will be decreased;   

- In case of the activation of EU Peacekeeping Mission in Georgia (today according to the agreement – EU Monitoring Mission – EUMM is functiong near the occupied territories of Georgia), more stable security environment will be established and it will simplify the investments in the energy sector of Georgia;  

Based on the pessimistic and optimistic scenarious, the perspectives of the events development in short-term and long-term perspectives 

- European Union and sevaral states from the South-East Europe will carry out some steps for the decreasing the dependence on the Russian energy resources, which will be reflected on the increasing the producing of the alternative sources of energy;

- EU will try to increase the import of oil and gas from North Africa and the Middle East;

- From its turn, Russia will try to hamper the realization of the TANAP project, with the involvement of the Central Asian states. For this purpose, official Moscow will conduct the negotiations with Azerbaijan, Turkmenistan and Kazakstan – related to the increasing the import of oil and gas from that states, which will decrease the gas volume for the implementation of the TANAP or other projects;  

- Russia will continue the negotiations with Turkey, related to the implementation project Blue- Strem – 2 (capacity-63 Billion Cubic Meters of Natural gas)⁸;

- In the short-term perspectives, the negotiation process related to the implementation the different projects, will be continued, but due to the financial problems and absense of the appropriate contracts, most probably, the starting of the pipelines construction is not expected;

- The functioning of the railway: Baku-Tbilisi-Akhalkalaki-Kars will be started and the transportation of oil products and pother goods (from 5 till 17 million tones) by this route will be possible.

               

Conclusion:

Taking into consideration, that except of the projects, where Georgia particpates or will be participant as a transit country, there are alternative projects, existing or perspective pipelines, which are iniciated by Russia. In this case for Georgia is very important to conduct successful negotiation process with the potential partner countries and companies, for the discussion the further increasing the capacity of the existing pipelines and making the final desicion about perspective oil and gas pipelines, which should cross the territory of Georgia. Thus, successful implementation of those projects will strengthen the national souverenity and statehood of Georgia.