This issue brief examines the potential for new fossil fuel developments in the Caspian region to meet Europe’s energy needs. With increased regional interconnectivity, large fossil fuel resources, political support for fossil fuel development, and growth in domestic renewable energy generation, Caspian producers—namely Azerbaijan, Turkmenistan, and Kazakhstan—have the potential to meet this need on the timeline required. To do so, they must act on stated plans to increase natural gas production and tap domestic renewable energy sources. 

This brief also examines the regional factors in Southeast Europe, including gas flows, infrastructure changes, and market demand, which would affect Caspian fossil fuel supplies’ availability in Europe. Georgia, Turkey, Italy, and Southeast and Central Europe stand to directly benefit from Caspian gas via the Southern Gas Corridor. They can also serve as conduits of these supplies further north and west.  

However, economic and geopolitical factors could hinder the rapid production and export of additional supplies from the Caspian region. Raising finance for oil and gas projects has become difficult as international financial institutions and the European Commission seek to reduce fossil fuel investment. Moreover, while proposals on both sides of the Caspian for large-scale hydrogen export projects targeted at European markets are ambitious, the complexity of delivery means they may take years to mature. Azerbaijan’s military actions in Nagorno-Karabakh may also impact European willingness to increase energy reliance on Azerbaijan. By successfully navigating these obstacles, Caspian producers can further contribute to European energy security.

Fellow

John M. Roberts

Nonresident Senior Fellow

Global Energy Center

Energy & Environment

Julian Bowden
Senior Visiting Research Fellow
Oxford Institute for Energy Studies

The authors are on the advisory board of a project to lay a forty-eight-mile connector pipeline between the Petronas-operated Magtymguly field in Turkmenistan and gas-gathering facilities operated by BP in Azerbaijan’s ACG oilfield.

EnergySource Dec 12, 2022

Europe and the Caspian: The gas supply conundrum

By John Roberts and Julian Bowden

The Caspian has emerged as a major player in Europe’s effort to move away from Russian gas. But logistical and political difficulties could prevent crucial Caspian projects from getting off the ground.

Central Asia Energy & Environment

EnergySource Mar 20, 2022

Removing Russia from the European gas balance: A major role for Caspian gas

By John Roberts and Julian Bowden

Exporting more Caspian gas to Turkey could free up precious LNG cargoes for consumption in the EU market. Three Caspian options in particular would go a long way to ensuring the EU can get out from under Russian gas hegemony.

Energy & Environment Europe & Eurasia

EnergySource Aug 20, 2020

Trans-Caspian Pipeline—Still a pipe dream?

By Daniel D. Stein

Although there have been intermittent efforts to revive the Trans-Caspian Pipeline (TCP), the project has largely been dormant in recent years. However, the impending completion of the Southern Gas Corridor (SGC), a new source and route of gas supply to Europe, has led to renewed interest in TCP.

Energy & Environment Energy Markets & Governance

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Image: A view of the Interconnector Greece-Bulgaria (IGB) gas pipeline that will carry gas from Komotini to Stara Zagora in Bulgaria, in Komotini, Greece, July 8, 2022. REUTERS/Alexandros Avramidis