The chorus of the slaves in Babylon is the highlight of Verdi’s opera “Nabucco”. In 2002, after listening to a performance in Vienna, executives from European and Turkish energy companies took the name for their planned gas pipeline from the Caspian and Middle East. Nabucco did not proceed, but something similar today could liberate Europe from Russian gas.
Nabucco was intended as the keystone of the “fourth corridor” of gas pipelines to Europe (the first three being from Russia, Norway and North Africa). It would have run from Erzurum in Turkey into the Balkans and concluded in Austria.
Its supplies would have come mostly from the Shah Deniz field in Azerbaijan, but also from Central Asia, the Middle East and east Mediterranean. The partners were leading Austrian (OMV), German (RWE), Hungarian (MOL), Bulgarian, Romanian and Turkish energy and pipeline companies, and the EU backed the project.
But it ultimately lacked a sufficiently strong lead in the consortium, and it was undermined by the Russian promotion of South Stream, a line under the Black Sea to Bulgaria, the southern counterpart of the notorious Nord Stream. This ultimately morphed into Turkish Stream, bypassing the old route for Russian gas through Ukraine.
The Shah Deniz venture opted instead to support a new, smaller Trans-Anatolian pipeline to Turkey, and Trans-Adriatic pipeline (Tap) to Greece, Albania and Italy. Europe’s climate targets meant it lost interest in backing major new fossil fuel infrastructure.
Now, Europe is desperately searching for alternatives to Russia. Liquefied natural gas (LNG), delivered by ship, is the priority, with new import terminals planned in Germany. On Friday, the US and EU announced a deal to supply 15 billion cubic metres of LNG this year, about a tenth of the amount the continent imports through Russian pipelines, and 50 billion cubic metres (bcm) by 2030. The German Economy Minister Robert Habeck visited Doha and Abu Dhabi last week in search of LNG.
But LNG is expensive, there is little spare on the market, and a major expansion of global production capacity will only come in 2025-27. So, Europe should also be scouring its neighbourhood for new non-Russian pipeline options.
Norway is doing the best it can. Europe should certainly engage more in Libya, but expansion of its gas exports will require more political stability and several years of investment.
European politicians have been speaking to Algeria, which could boost supplies. Potential, however, is limited by past underinvestment and rising domestic demand. Exports to Spain are hampered by Algiers’ refusal to use a pipeline running via Morocco due to a dispute with Rabat. The prickly government does not respond well to outside cajoling.
So, any large-scale neighbourhood solution will have to revive the old Fourth Corridor. This has been facilitated by the Russian switch to South Stream, which has freed up the Trans-Balkan pipeline through Ukraine to supply south-eastern Europe. New interconnections are being completed, such as the Greece-Bulgaria link, which should be ready in June, and Bulgaria-Serbia next year. Tap’s 10 bcm of annual capacity could be doubled.
Turkey, which has historically imported nearly all its gas requirements, is developing its first large domestic fields, Sakarya and Amasra in the deep waters of the Black Sea, which might together yield 20 bcm per year.
There are four major potential suppliers of new or expanded volumes into Turkey. Iran will remain difficult to deal with, even if the nuclear accord is revived and the US eases sanctions. Despite having the world’s second-largest reserves, it will use most of its production domestically, especially in winter when Europe also needs it most.
Turkmenistan holds the fourth-largest reserves, and new president Serdar Berdymuhamedow, who replaced his father on March 19, might want to diversify from selling only to China. Resolution of a Caspian border dispute last January could pave the way for a pipeline link across the sea, but Ashgabat has never been easy to deal with.
Prospects of the eastern Mediterranean were bolstered by positive results last week of ExxonMobil’s large Glaucus find in Cypriot waters. Egypt’s LNG plants are running below capacity and could export more, especially in winter when local demand drops. But Egypt will itself probably be short of gas again by the mid-2020s.
The long-proposed subsea pipeline from Israel to Cyprus, Crete and mainland Greece still looks economically and politically unfeasible, facing Turkish opposition.
The most feasible source, therefore, looks like the Kurdistan Region of Iraq. Already, an internal pipeline is being extended to the city of Dohuk, near the Turkish border. The Pearl Petroleum consortium, featuring UAE-based Dana Gas and Crescent Petroleum, alongside RWE, MOL and OMV, is expanding gas output. Further field development could create a surplus for export to Turkey, and either on to Europe or freeing up other Turkish supplies.
But several other large Kurdish gasfields remain undeveloped. Erbil’s policy on gas exports is unclear, despite some recent warm words between Turkey’s president Recep Tayyip Erdogan and Kurdistan Region president Nechirvan Barzani.
Many European policymakers and environmentalists would oppose construction of new gas infrastructure as incompatible with net-zero carbon goals. To counter this, new pipelines should be ready to carry hydrogen when available, instead of natural gas. It should be legally assured that any gas imports through new infrastructure would replace Russian supplies, not create additional gas consumption in Europe.
If Europe wants to solve its Russian gas problem, it will have to look to its own neighbourhood more as well as hanging on Washington’s coat-tails. It needs to discard some environmental shibboleths and be more politically imaginative and assertive. A rebuilt Fourth Corridor is one way out of energy captivity.
Robin M. Mills is CEO of Qamar Energy, and author of The Myth of the Oil Crisis