November 15 marks the fifth anniversary of the start of commercial operations of the Trans-Adriatic Pipeline (TAP), the final leg of the Southern Gas Corridor delivering gas from Azerbaijan to Europe. And it’s been a remarkable story - in that time, Azerbaijan and TAP have unexpectedly become critical to Europe’s efforts to wean itself off Russian gas. However, the future path is uncertain as the desire for more gas from Azerbaijan in the short to medium term runs up against the EU’s long term decarbonisation commitments. 

The Southern Gas Corridor (SGC) - comprising the South Caucasus Pipeline from Azerbaijan to Turkey via Georgia; the Trans-Anatolian Pipeline (TANAP) across Turkey; and TAP to Italy via Greece and Albania - was always seen as a way to deliver Caspian gas from the offshore Shah Deniz gasfield to Europe without passing through Russia. Originally proposed in 2003, construction began in 2016. But the final few kilometres in Italy were beset by environmental protests and court delays, with concerns raised about olive groves, beaches and marine life, the protests being widely believed to have been supported clandestinely by Russia as a way of protecting its monopoly on pipeline gas supplies from Eastern Europe. However, the protests were finally overcome, construction was completed, commercial operations started, and the first gas from Azerbaijan was delivered to Italy on 30 December 2020. 

In addition to the 8bcm per annum being delivered to Italy, TAP was also designed to deliver 1bcm to Greece and 1bcm to Bulgaria (via a new interconnector between Greece and Bulgaria, which - after some delays - became operational in October 2022).

So far, so good. But the Russian invasion of Ukraine in 2022 completely changed the picture. While the EU never imposed sanctions on Russian pipeline gas, the closure of NordStream1, the destruction of NordStream 2 and the decision by several member states to reduce their dependence on Russia led to a steady stream of visitors to Baku to ask for additional Azerbaijani gas via TAP. And in July 2022, the EU Commission signed an MOU with Azerbaijan to double the capacity of the SGC to deliver at least 20bcm to the EU by 2027. In the meantime, Azerbaijan and the commercial partners were squeezing more capacity from the pipeline, and by 2024 had increased supplies to Europe from the anticipated 10bcm per annum to 13bcm.

The next crisis point for several European countries was the closure by Ukraine at the end of 2024 of the sole remaining direct gas pipeline from Russia to the EU. This reinforced further the importance of Azerbaijani gas supplies, and the number of European countries now receiving - or due to receive - Azerbaijani gas via TAP has grown significantly from the original three countries - Italy, Greece and Bulgaria - to twelve, with Hungary, Slovakia, Romania, Slovenia, Croatia, Germany, Serbia, North Macedonia and Ukraine all added to the list.

This is a remarkable achievement, and a clear demonstration of Azerbaijan’s role as a reliable partner for Europe. Even more impressive is that Azerbaijan has additionally committed to deliver an initial 1.2bcm per annum to Syria, rising to 2bcm, via a swap arrangement with Turkey.

So what now? With further gas supplies due to come on stream in Azerbaijan, and the possibility of gas from Turkmenistan, the Azerbaijani government and the commercial partners are keen to expand the capacity of the SGC to enable them to meet the aspirations in the 2022 MOU to double gas volumes to the EU. And with the EU recently agreeing on a phased ban on all imports of Russian gas by 2028 (which would include LNG imports and gas via the Turkstream pipeline from Russia to Turkey), the EU has a clear need to identify alternative supplies. 

However, there’s a hitch. The EU - in the face of its decarbonisation commitments under the Green Deal - has been stalling on agreeing the long term gas purchase commitments needed to underpin the financial case for SGC expansion, thinking instead about the shorter term options of relying on LNG from Qatar and the US. And European financial institutions are unwilling to provide financial backing for fossil fuel projects. 

Hence - even though everyone agrees that the expansion of supplies from Azerbaijan is a good thing, and indeed both sides have signed up to it - the way ahead is unclear. Will the EU make the necessary commitments to meet the shared aspirations of more Azerbaijani gas to Europe, or will the Azerbaijani government and its partners need to take their own decisions on whether and how to finance the SGC pipeline expansion? TAP has so far exceeded the expectations for it, so who would be willing to bet against it becoming an even more important element of European energy security in the future?