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U.S. Sanctions on Iran May Not Endanger Key Pipeline from Azerbaijan

Trump signs a waiver to avoid harming European energy independence from Russia, while Bulgaria hopes to woo Moscow and become part of the TurkStream pipeline.

8 August 2018

The United States continues to walk a thin line between sanctioning Iran and encouraging energy independence in Europe. On Monday, U.S. President Donald Trump signed an executive waiver from U.S. sanctions targeting Iran's energy customers for a "natural gas project exception" – describing the Southern Gas Corridor (SGC) without specifically naming it, S&P Global reports.

 

The European Union-backed SGC, when finished, will transport gas from Azerbaijan’s Shah Deniz offshore across Georgia, Turkey, Greece, and Albania to Italy. Most importantly, it would bypass Russia, which supplies about 30 percent of Europe’s natural gas and from which European countries are seeking greater energy independence.

 

Iran's NICO, a Swiss-based subsidiary of the National Iranian Oil Company, has a 10 percent share in the Shah Deniz fields, the main source of the corridor’s natural gas, which could make it a target for U.S. sanctions against Iran’s petroleum sector investments that will be reinstated in November.

 

Meanwhile, in another development that could affect Europe’s energy capacity, Bulgaria boosted its gas transit capacities after opening a new looping section of its transit gas pipeline to Turkey last Friday, Reuters reports.

 

“Now we have constructed a pipeline that will allow for reversible flows, so we can get gas from Turkey, from Azerbaijan and Russia,” Prime Minister Boyko Borissov said at the official ceremony of the 20-kilometer (12-mile) link in the southeast of the country.

 

Sofia hopes that Moscow will choose it as an entry point for its TurkStream pipeline, which is expected to become operational next year, and to allow Russia to bypass Ukraine, at this moment the main transit route for Russian gas to Europe.    

 

TurkStream is made up of two pipelines bringing Siberian gas under the Black Sea to Turkey, the first one providing gas for local consumption. Bulgaria, competing with Greece, has its eyes on the second pipeline, which is intended to ship Russian gas to Serbia, Hungary, and Austria, according to Reuters.

 

The United States has said it opposed Turkstream for security reasons.

 

 

  • The waiver also made reference to the Iran Threat Reduction and Syria Human Rights Act of 2012, a U.S. law laying out an exemption for "the development of natural gas and the construction and operation of a pipeline to transport natural gas from Azerbaijan to Turkey and Europe." The law says the corridor "provides to Turkey and countries in Europe energy security and energy independence" from Russia. 
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  • The ceremony for the launch of the first stage of the SGC was held at the end of May in Baku. The SGC is comprised of three pipelines: the South Caucasus pipeline across Azerbaijan and Georgia, the TANAP pipeline from the Georgian-Turkish border to the western border of Turkey, and the Trans-Adriatic Pipeline (TAP) across Greece and Albania, with an offshore section to southern Italy, GT writes.
  •  

  • The second phase of TANAP is 85 percent finished, its completion expected in June 2019, while gas deliveries to Greece are expected at the end of 2019, according to AzerNews. Commercial gas deliveries to Turkey through the Southern Gas Corridor started on 30 June.
  •  

  • During his first official visit to Azerbaijan last month after being re-elected president, Turkish leader Recep Tayyip Erdogan expressed his belief that “our brotherhood will continue to strengthen,” a fact made obvious through the countries’ collaboration on TANAP and TAP, AzerNews writes in a different article.

Compiled by Ioana Caloianu

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