EU is interested in realization of TransCaspian pipeline

(Interview of Turan news agency with Mr. Maroš Šefčovič, Vice-President of the European Commission in charge of Energy Union)

Question: What is the position of the EU towards project of Trans-Caspian pipeline? At what stage are negotiations between Brussels, Baku and Ashgabad on this issue?

Answer: The construction of the Trans-Caspian pipeline is seen by the EU as a mutually beneficial project that serves the strategic and commercial interest of all partners. There is a strong commitment from both Azerbaijan and Turkmenistan to move forward towards the realization of the project. The EU is, of course, interested to receive the additional volumes that the Trans-Caspian pipeline could bring, and will also continue to work constructively to make this happen in cooperation with its partners. 

To this end, we will continue our trilateral negotiation process with both Azerbaijan and Turkmenistan in accordance with the mandate received from the Council of the European Union back in 2011. Further, we hope that the construction of the Southern Gas Corridor will also contribute to accelerating the discussions for the Trans-Caspian pipeline.

In this context, it is also worth noting that the Environmental Scoping Study for the Trans-Caspian pipeline has recently been finalized.

Question: What about the “South Stream” project, do you think it can be realized? If yes, at what conditions? What are your estimations of the position of official Budapest on that issue ?

Answer: The main pre-condition to the development of the South Stream project, as to any other major infrastructure project in Europe, is having a solid legal and regulatory framework in place. In this respect, the Commission has clearly and repeatedly underlined the South-Stream natural gas pipeline cannot be constructed until full compliance with EU law, in particular internal market and competition law, is ensured.

This is not yet the case, as the South Stream Inter-Governmental Agreements and the way in which they have been implemented so far, are not in line with the EU acquis. Pipelines developed and operated in conflict with EU law can endanger the functioning of the internal market and create risks for the security of supply in the EU.

South Stream is a very complex project in terms both of European and international law. The Commission has at many occasions addressed this concern to the involved Member States in order to resolve the identified legal issues in a cooperative manner.

As regards the recently amended Hungarian legislation which opens the way for constructing a pipeline in Hungary, the European Commission is now reviewing whether this is in breach of European law. We are currently seeking clarifications from the Hungarian authorities on the matter. Should the Commission conclude that the amendment infringes EU law, we will ask the Hungarian Government to amend it swiftly and bring it in line with European legislation.

Question: Do you see any possibility of participation of Iran in the project of the “Southern  Gas Corridor” and supplies of Iranian gas to Europe via this route?

Answer: Iran is a big regional actor and the EU shares the interest in improving relations. Since very recently we even have a window of opportunity. The good progress towards a comprehensive agreement on the Iranian nuclear programme could open up possibilities for a much broader framework of cooperation. Depending also on the progress of the implementation of the measures foreseen in the Joint Plan of Action of 24 November 2013, it could be foreseeable for the EU and Iran to engage in a structured dialogue for increasing energy cooperation.

Indeed, energy could become an important area for EU – Iran cooperation also in view of the potential return to Iran's role as a key exporter of crude oil and gas. The on-going opening of the Southern Gas Corridor would present a great opportunity for Iran to reach the EU gas market.

However, it should be made clear that on the basis of the currently available information concerning the future gas production, even on a long term basis, Iran is very unlikely to become a major gas exporter to Europe. A best case scenario could involve some 25-35 BCM’s exports by 2030. The reason has partly to do with the difficulties in establishing direct export routes but also with Iran’s priorities and commitment in servicing the needs of its large and growing domestic and peripheral market. -02В-