By Fuad Shahbazov, Baku-based independent regional security and defence analyst

Two agreements signed at the end of May advanced Azerbaijan’s efforts to establish itself as a key energy provider in Southeast Europe, going beyond its role as a producer of hydrocarbons to enter the electricity markets in the region as well. On May 29, Azerbaijan, Georgia, Romania and Hungary signed a memorandum to create a joint venture as part of the implementation of the Black Sea Energy Caspian-Black Sea-Europe Green Energy Corridor project. The first agreement regarding the submarine cable was signed in 2022 and it is supposed to be fully operational in 2029. The Black Sea submarine cable will be 1,195 km long and is set to be an important pillar of the transition to green energy, with the plan to integrate it into the EU's internal electricity market. As an attempt to diversify energy supplies in response to Russia's war in Ukraine in February 2022, the Black Sea cable is of particular importance. READ MORE

By Vasif HUSEYNOV, PhD, Head of Department, AIR Center, Adjunct Lecturer, ADA and Khazar Universities, Baku

In the shifting landscape of global energy dynamics and geopolitical uncertainties, the relationship between Azerbaijan and the European Union (EU) has emerged as a beacon of mutually beneficial and strategic partnership. The relationship between the two sides is multilayered and is of wider geostrategic importance. While the EU, among others, is a major partner for Azerbaijan constituting about 65 percent of its total foreign trade, Azerbaijan is a critical country for the EU in the Europe-Asia connectivity, and as an energy supplier. The cooperation in the field of energy is particularly of great importance for both sides and has gained momentum against the backdrop of regional geopolitical upheavals and efforts to pursue green transition.
The two sides have forged a strategic partnership in the field of energy that is pivotal for both sides economic prosperity and energy security. Ursula von der Leyen, President of the European Commission, called Azerbaijan a “reliable partner” of the EU, when she signed the deal on the strategic partnership with President Ilham Aliyev of Azerbaijan, on July 18, 2022. READ MORE

By Nika CHITADZE, PhD, Director of the Center for International Studies, Tbilisi

The third decade of the 21st century, along with other global events and changes, is remarkable in terms of energy. The global cataclysms and the ongoing war on the European continent have particularly highlighted the political and ecological importance of energy. Despite the vital challenges, Europe is firmly committed to the policy of the Green Energy Agreement and the way to combat climate change.
The reduction of fossil fuels was already a priority of the environmental policy, which was not only changed after the start of the war by Russia but also the sanctions introduced against the aggressor were added. Sanctions mostly apply to energy carriers, which Russia has been using as political leverage for many years. The created situation showed us that Europe needs reliable corridors for the import of the same products along with the production of green energy. This situation opens completely new opportunities for several countries, among which Georgia occupies a key place – Georgia, which is an important link of the middle corridor. READ MORE

By Fuad SHAHBAZOV, Baku-based independent regional security and defence analyst

Russian military aggression against Ukraine launched almost two months ago has clearly signalled a change in the traditional world order and triggered the unprecedented reaction of the Western coalition led by the U.S. The ongoing conflict between Russia and Ukraine has left the global energy market uncertain, threatening to cause severe energy shortages and oil prices exceeding $110 per barrel.
Since the Russian intervention in Ukraine kicked off, numerous sanctions packages have been imposed on Russia, hitting mostly financial institutes and state-owned companies. This resulted in Western countries’ consolidation, and the collective refusal of Russia-related transactions and import of Russian natural gas, oil, and coal. READ MORE

by Dr Jack Sharples (Oxford Institute for Energy Studies and EGF Associate Researcher)
Mike Fulwood (Oxford Institute for Energy Studies)
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We analyse the drivers behind ongoing price rally and offer an outlook for the coming winter. On the global LNG market, unexpected outages meant that growth in supply simply did not keep pace with the increase in demand. Given its role as the ‘balancing market’, European LNG imports declined. This combined with declines in European production and pipeline imports to open a supply gap that could only be met by withdrawals from storage. We conclude that with gas markets noticeably tighter, the ongoing price rally is driven by fundamentals, with an added ‘fear premium’ that the forthcoming winter could be as cold as that in 2020/21. If that proves to be the case, the current price levels will persist, and even rise, while a milder winter could see the market turn slightly more bearish. READ MORE.

Embassy of the Republic of Uzbekistan in the Kingdom of Belgium

On 29 January 2021 the Brussels-based media outlet EU Today and the Brussels Press Club in Brussels hosted a conference dedicated to the construction of nuclear power plants in Belarus, Turkey and Uzbekistan. Despite the fact that plans for the construction of new power units are being considered at various stages both in the EU member states-Finland, Hungary, the Czech Republic, Bulgaria, and in the UK, Pakistan, the United Arab Emirates, etc., the discussion was focused on these countries. Much attention at the conference was paid to the construction of nuclear power plants in Uzbekistan. READ MORE

By Jack Sharples, PhD, Research Fellow of the Oxford Institute of Energy Studies and EGF Associate Researcher on the External Dimensions of Russian Gas

Gazprom Export launched its Electronic Sales Platform (ESP) in the context of an increasingly competitive European market. Sales volumes have grown, and have averaged 2 bcm per month since April 2019. As a result of this growth, the ESP is now a key part of Gazprom’s European sales strategy: It generates additional sales revenues, optimises Gazprom’s use of is physical export infrastructure, and provides a constant flow of valuable market data that informs Gazprom’s wider sales strategy. Sales are largely concentrated in four countries, while deliveries are split between Ukrainian and non-Ukrainian routes. ESP sales prices closely track European hub prices for comparable products, and the sales volumes show that Gazprom’s counterparties consider the ESP an attractive offering. The operation of the ESP highlights the crucial element of Gazprom’s European sales strategy: The importance of nuanced optimisation, as Gazprom seeks to maximise its sales volumes without placing excessive downward pressure on European hub prices that would impact revenues from its hub-indexed LTC portfolio. Overall, the ESP demonstrates how far Gazprom has evolved in the past decade, as it seeks to retain market share on an increasingly competitive European market. READ MORE

By Jack Sharples, Research Fellow of the Oxford Institute of Energy Studies and EGF Associate Researcher on the External Dimensions of Russian Gas


Dear Colleagues,

It is with great pride that we send you this 100th edition of the Gazprom Monitor.

The Gazprom Monitor was the brainchild of Dr Marat Terterov, Founder of the European Geopolitical Forum and the Brussels Energy Club. The first issue of the Gazprom Monitor was published in December 2010. […] Since that first edition, almost nine years ago, we have seen the launch of Nord Stream, the replacement of South Stream and Nabucco by the Turkish Stream and TANAP-TAP pipelines, a dramatic increase in the use of hub-indexation in place of oil-indexation in Gazprom’s long-term export contracts, the conduct and settlement of the EU antimonopoly investigation into Gazprom, the launch of Gazprom’s own Electronic Sales Platform, the completion of Gazprom’s acquisition of the Belarusian gas pipeline system, the long-running sagas of the Gazprom-Naftogaz and Gazprom-Lithuania arbitration cases, the cessation of direct Ukrainian gas imports from Russia, the sale of Gazprom’s shares in pipelines in the Baltic states, the launch of new LNG import terminals in the Netherlands, Lithuania, Poland, and France, opening the door to competing LNG from around the world including, most recently, from the United States, and the volume of Gazprom’s annual gas exports to Europe growing to record levels in 2017 and 2018.READ MORE

By Fuad Shahbazov, Baku-based independent regional security and defence analyst

On October 3, Azerbaijani President Ilham Aliyev paid an official visit to Russia to attend the 16^th annual meeting of the Valdai International Discussion Club, in Sochi (President.az, October 3). Aliyev’s speech at the high-level event touched on multiple topics, including Azerbaijan’s partnership with Russia, the unresolved issue of Karabakh, and regional security in the South Caucasus region, to name a few. Notably, during his remarks, Aliyev declared, “Nagorno-Karabakh is Azerbaijan—exclamation point!” which sparked heated discussions in both Azerbaijani and Armenian mass media and online (Turan Agency, October 4). READ MORE

By Greta K. Wagner, Student, University of Glasgow, Intern, The European Geopolitical Forum

The Black Sea is often described as a strategic crossroads, which links east-west and north-south transport corridors. Particularly with regard to hydrocarbon resources, the Black Sea serves as a transit route between suppliers in Russia, the Caspian region, Central Asia and the Middle East and consumers in the European Union. Given its strategic importance, the Black Sea is an important puzzle piece for Russia’s “energy superpower” strategy. READ MORE.

By Fuad Shahbazov, Baku-based independent regional security and defence analyst

On May 29, Azerbaijan’s President Ilham Aliyev officially inaugurated the first phase of the long-awaited flagship project Southern Gas Corridor (SGC), through which Caspian natural gas from the Shah-Deniz II field will be transported to Europe. The new project consists of several pipeline networks that pass through Georgia and Turkey (via the Trans-Anatolian Pipeline, TANAP) and further through Greece, Albania and Italy (via the Trans-Adriatic Pipeline, TAP). As Shah Deniz Stage 2 is implemented, gas production will increase from 9 to 25 billion cubic meters (bcm) per year. READ MORE

By Benyamin Poghosyan, PhD, Executive Director, Political Science Association of Armenia

On June 12, the official launch ceremony of the TANAP pipeline was held in Turkey. TANAP is the key component of the Southern Gas Corridor, which should bring Azerbaijani gas to Europe, circumventing Russia. At the initial stage, annually 6 billion cubic meters of gas will be supplied to Turkey and another 10 billion through South Eastern Europe mainly to Italy. In later stages, the volume may be increased due to additional gas from the Azerbaijani Shah Deniz field, or potentially involving other gas sources such as Iraq and Turkmenistan. READ MORE

By Elkhan Nuriyev, BREC Global Energy Associate, EGF Affiliated Expert

This opinion piece applies post-conflict scenario planning to the future of the regional energy security cooperation in the Black Sea-Caspian basin and describes collaborative steps that could be taken by all relevant players to think more deeply about promoting the integration of energy markets in this part of the world.
Notwithstanding the most acute unpredictability of the new societies in Eastern Europe, the South Caucasus and Central Asia in the 1990s, the young states simultaneously faced the need for intense capital investments in their energy sectors that could drive economic growth. Since then, both the Black Sea and the Caspian basin alike have become crossroads for increased commerce and economic development as the old Silk Road is revived. READ MORE

By Benyamin Poghosyan, PhD, Executive Director, Political Science Association of Armenia

Long term economic development may play a key role in defining the balance of power between Armenia and Azerbaijan.
Last month has seen Armenia engaging in high level contacts with Iran and Turkmenistan. Armenian President Serzh Sargsyan participated in Iranian President Rouhani's inauguration. During a bilateral meeting between the two presidents perspectives for developing Armenian - Iranian relations were discussed including the possibility to expand the cooperation in the energy sphere. READ MORE

Ahmed Mousa Jiyad,
EGF Affiliated Expert

Following closely after the ground-breaking Turkey-Russia gas export/pipeline MoU announced last week, another agreement was publicized between the Iraqi government and the KRG that could send additional KRG gas to Turkey. Some argue that, if the KRG ramps up and exports significant volumes, it could pose problems for Putin’s new plan. EGF Affiliated Expert Ahmed Mousa Jiyad explains why this is unlikely. READ MORE

Dr Radu Dudau,
director of the Energy Policy Group Bucharest (EGF Information Partner)

Romania’s most important foreign energy policy project, the Nabucco gas pipeline, collapsed in June 2013 as the rivaling TAP (Trans-Adriatic Pipeline) won the bidding for transporting Azerbaijani gas to the EU. Hence, the Southern Gas Corridor (SGC) will link the Caspian Basin to Southern Italy via Turkey, Greece, Albania, and the Adriatic Sea. Shah Deniz consortium’s choice was predominantly commercial, yet it came to the detriment of Eastern Europe’s strategic necessities. But, although left with no large scale international project, Romania keeps significant options to improve its energy security on the medium term. This paper reviews Romania’s prospective new sources –internal and external – of primary energy. READ MORE

Jack Sharples, EGF Associate Researcher and Andrew Judge, EGF Guest Contributor

The current tensions in Ukraine have generated speculation about the security of Russian gas supplies to the EU via Ukraine. This short article analyses the likelihood of a suspension of Russian gas supplies via Ukraine and the impact of such a suspension on EU gas imports. We find that a suspension of gas transit is far from inevitable, but cannot be ruled out. The impact of such a suspension would disproportionately affect Central and South-East Europe, with this region divided between those that have access to gas storage and/or alternative supplies, and those that do not. In this regard, Bulgaria remains the only EU member state in this region that has neither sufficient gas storage nor access to alternative supplies. READ MORE

Jack Sharples, EGF Associate Researcher and
Andrew Judge, EGF Guest Contributor

Amidst the current tensions about Russian military deployment in Crimea, there has been considerable speculation in the European and American media about the security of Russian gas supplies to the EU. Such speculation is generated by a combination of concerns over the level of dependency on Russian gas imports faced by several EU member states and fears that the Russian government considers gas exports to be an ‘energy weapon’ that can be deployed against its former Soviet neighbours. This short article will address the likelihood of a suspension of Russian gas supplies to Ukraine and the impact of such a suspension on EU gas imports. READ MORE

Fatemeh Shayan, University of Eshfahan, Iran
University of Tampere, Finland
Guest contributor to EGF

Do such organisations exist beyond the ‘self fulfilling prophecy’ level?
Much research has examined energy relations between the European Union (EU) and Russia,[1] but not the larger picture of energy relations between the EU and the Gas-Troika, made up of members Russia, Iran and Qatar. Although the Gas-Troika is in an early stage of development, increasing demand for gas, especially from the EU, has noticed members to attempt to present it as a future gas superpower. READ MORE

By Valentin Stoyanov
EGF Affiliated Expert
Gazprom’s South Stream gas pipeline project has been highly visible in the European media in recent months and appears to be going from strength to strength. The project seems to have high level political support and there is much speculation that actual construction is imminent, particularly in Serbia and Bulgaria. There are also rumors that the Russian company, Stroytransgaz, has signed “construction contracts” and is ready to commence operations. Further, in December 2012 there was even a symbolic first welding of pipes in the Russian coastal town of Anapa. For better or for worse, and taking into account the wider energy security debate between the EU and Russia, all of these developments appear to reflect “evidence” that the South Stream project is just about upon us. READ MORE

by Professor Natasha Udensiva
The U.S. shale gas revolution is spreading: more and more countries are talking about developing their own shale gas resources. How is this relevant for Gazprom? It is relevant because, with more countries developing their natural gas resources, Gazprom’s once-powerful monopoly may soon lose its hold on the European market. So far, the company’s strategy has relied on the exclusiveness of its vast resources. But shale development is undermining this very quickly. Soon, access to technology will trump resource access. Then, Gazprom’s only chance of reasserting its presence will be to lower its prices. READ MORE

By Igor Alexeev
Russian journalist and blogger for Strategic Culture Foundation and Route Magazine. He writes on the oil and gas sector, Eurasian energy security and shipping industries in the Arctic.

European countries, including the Netherlands, Finland and the United Kingdom expressed their interest in the expansion of Nord Stream. The third and fourth strings of the pipeline enjoy the highest level of political support in Europe. As a result Nord Stream will be the cornerstone of European energy security in the decades to come.
Nord Stream Fact Sheet

• Nord Stream is a twin pipeline system through the Baltic Sea transporting natural gas from Russia to Europe;
• It runs across the Baltic Sea waters from the Portovaya Bay (near Vyborg) to the German coast (near Greifswald) stretching over 1224 kilometers;
• The third and fourth lines are planned for annual capacities of 27.5 billion cubic meters each;
• The stakes in Nord Stream AG are distributed as follows: Gazprom holds 51%, Wintershall Holding and E.ON Ruhrgas – 15.5% each, Gasunie and GDF Suez – 9% each;
• Nord Stream will export gas from the Yuzhno-Russkoye oil and gas field, the Yamal Peninsula, Ob and Taz Bays and in perspective Shtokman field;
• The cost of construction of the first two sections was $7.4 billion.

By Igor Alexeev
Russian journalist and blogger for Strategic Culture Foundation and Route Magazine. He writes on the oil and gas sector, Eurasian energy security and shipping industries in the Arctic.

South Stream is an ambitious endeavor of Russia’s energy giant Gazprom to get direct access to the EU energy market. It is portrayed and criticized by some politicians in Europe as a “dangerous” gateway to a broader economic relationship with Moscow. Remarkably enough, Bulgaria, Serbia, Croatia, Slovenia and Hungary have one-by-one opted for the project.
The South Stream Fact Sheet

• Gas pipeline will be 1455 km long in Southern and Central Europe;
• 8500 people will be employed in its construction, with 770 at the operational level;
• Eight compression stations are to be set up in the main transit countries;
• The South Stream planned transport capacity may reach 63 billion cubic meters;
• The overall cost of the project is approximately $39 billion.

Mehmet Öğütçü,
EGF Expert on global energy security matters

The discovery of large gas reserves off the coasts of Israel and Cyprus posed a number of dilemmas for Turkey. Its response reflected both resource rivalry and underlying political conflicts. Turkey and its neighbors need to avoid harsh rhetoric and brinkmanship. Instead, pending solutions of bilateral differences, they should consider interim agreements to reduce risk and allow exploration and production to go ahead in a more predictable environment. To read more click here.

Martin Vladimirov,
Expert on Balkan-Black Sea External Relations and Energy Security

It has been two decades now since the southern energy corridor, linking the energy producing Caspian and Middle East regions with European consumers, was incepted. The 1990s proved to be very successful after the U.S. was able to fill in the geopolitical vacuum in the Wider Black Sea region and divert significant amounts of Caspian oil and gas away from Russia and in direction Europe. Yet the strong push for diversification of the European energy supply came to a sudden halt after 9/11. The U.S. changed its geopolitical priorities focusing on the destabilized Middle East and South Asia. Since then the EU has been painfully searching for alternatives in accessing the vast Caspian reserves. The Nabucco gas pipeline, which has been seen as the strategic continuation of the Baku-Tbilisi-Ceyhan (BTC) corridor, has remained only a distant dream as gas quantities available are simply not enough to fill the 31 billion cubic meters (bcm) pipeline capacity. READ MORE

by Marat Terterov,
EGF Director

1. What does Nord Stream mean for the energy security of the European Union?

There seems to be a strong debate about the impact of Nord Stream on EU energy security. On the one hand, we have the “side of the house” which feels that the project will make European gas consumers even more dependent on Russian gas supplies than they already are and that it will further strengthen Russian’s “grip” on the European gas imports market. READ MORE

Within the framework of the IMEMO’s Oil and Gas Dialog Forum BP's chief economist Christof Rühl presented BP Energy Outlook 2030 to the audience of the Russian academics It was stressed that the outlook’s ‘base case’ reflects a ‘to the best of our knowledge’ assessment of the world’s likely path from today’s vantage point, drawing on expertise both within and outside the company. The outlook highlights the growing role of developing economies in global energy consumption, and the increasing share of non-fossil fuels in global energy supply. It emphasizes the central role markets and well-designed policy can play to meet the dual challenge of solving the energy needs of billions of people who aspire to better lifestyles, and doing so in a way that is sustainable and secure. It also notes the uncertainties attached to any long term projection. The discipline of building a numerical projection sharpens our thinking, but the precise numbers are less important than the underlying story of the challenges we all face and the choices we make in producing and consuming energy. To read the report please click EGF or BP

In a recent briefing on Russia, this Forum expressed the view that Moscow is becoming an increasingly assertive regional player in the wider Black and Caspian Sea (BCS) basin and that energy remains a key Russian priority for the region. We commented in that report that the Russian state-controlled energy holding, Gazprom, provided Moscow with a significant instrument to exercise power in the region. 
The company has been widely employed as a means of developing (geo)-politically relevant energy cooperation with other former-Soviet states of the region, as well as securing bilateral energy deals with select foreign corporate and state partners. Yet a substantial degree of uncertainty has recently begun to emerge around Gazprom’s corporate prospects for the near term, clouding its capacity of advancing Russian geopolitical interests both in the BCS region as well as the wider European context. READ MORE

In recent years energy security has become not only a political buzzword but a fundamental concept in (re)shaping relations between governments within the framework of a newly emerging global energy order. Furthermore, factors such as the growing asymmetrical dependence of energy consuming states on producing states, the delicate question of transport (particularly the definition of future pipeline routes), changing trends of economic development, and geopolitical tensions tend to distort established negotiating positions and shift the balance of global power relations. In such a complicated context, it is easy to overlook developments in countries such as Poland which are not in the international spotlight. As Poland has shown resilience in avoiding recession and is becoming an important player in the international arena, it may be interesting to examine the actual dynamics and the core challenges of the country’s energy sector. READ MORE

Dr. Marat Terterov, EGF Principal Director, gave a lecture at Gubkin Oil and Gas University, Moscow, on November 19, 2010 on the topic “Energy and Geopolitics in Eurasia: why has energy become a factor of tension rather than a factor of cooperation ?” Please click here to read the key messages of the lecture.

Dr. Marat Terterov spoke at the International Conference, Gas Forum 2010 on 13th -14th September, 2010 in Warsaw, Poland, addressing the topic of “Old players, new identities and bargaining Instruments: A cost-benefit discussion of Southern Corridor oil and gas pipeline.” Please click here to read the key messages of the lecture and here to visit the conference program.

The energy trade between Russia and the countries of the European Union (EU) is of fundamental significance for the energy security of each party. Despite the close proximity of the EU-Russia energy relationship, however, the legal and political basis underpinning this relationship, particularly with regards to the gas trade, has proven itself inadequate in guaranteeing the energy security of both parties. Russia's recent announcement of its intention "of not becoming a member" of the Energy Charter Treaty, and new proposal for global energy security has created further uncertainty. While it is hoped that a new government in Kiev will lead to an improvement of Russian relations with Ukraine, Ukraine's national gas transportation operator remains in a difficult financial position and another gas crisis embroiling Ukraine, Russia and the EU, whilst hardly imminent, cannot be entirely ruled out.

Leading Russian and international energy professionals have shared their views on these energy policy challenges in an online session. Click here to go into the discussions or here to view forum summary