North–South Gas Corridor: Geopolitical Breakthrough in Central Europe
North–South Gas Corridor: Geopolitical Breakthrough in Central Europe
Contributor(s): Dariusz Kałan (Editor), Jarosław Ćwiek-Karpowicz (Editor), Brien Barnett (Editor), Dorota Dołęgowska (Editor)
Subject(s): Politics / Political Sciences, Politics, Economy, Supranational / Global Economy, Governance, Environmental and Energy policy, International relations/trade, Geopolitics, Transport / Logistics
Published by: PISM Polski Instytut Spraw Międzynarodowych
Keywords: North-South Gas Corridor; Central Europe; geopolitics; energy market; market liberalisation; building infrastructure; alternative gas suppliers; V4 governments; European Union; regulatory framework; Russia; Norway;
Summary/Abstract: Despite delays, a lack of short-term results, as well as turbulent domestic political agendas, the North–South Gas Corridor (NSGC or NSI) remains a priority for all of the Central European states. There are significant differences among them in terms of the level of market liberalisation, progress in building physical infrastructure, and with short-term priorities; however, first and foremost in common is a deep need to diversify both gas supply routes and suppliers. The goal is to achieve this using the same tools in each country—the development of new infrastructure, especially new interconnectors and underground gas storage facilities, contractual and trade arrangements (the introduction of physical and virtual reverse flows), market liberalisation, and the promotion of competition, spot markers and contracts with alternative gas suppliers. The V4 governments and regulators should be expected to continue coordination of efforts amongst themselves on a common regulatory framework for unified wholesaler trading zones, in parallel with the EU Single Market process (an integrated entry/exit network, a single virtual trading point, mergers of trading zones, etc.). In the long run, regional market liquidity might be increased through the establishment of a common gas trading hub, possibly at the future LNG terminal in Świnoujście, Poland. This could strengthen the hand of all of the purchasing countries from the region vis-á-vis their traditional suppliers, namely Russia and Norway.
Series: PISM Reports
- E-ISBN-13: 978-83-62453-72-6
- Page Count: 71
- Publication Year: 2013
- Language: English
Introduction
Introduction
(Introduction)
- Author(s):Jarosław Ćwiek-Karpowicz, Dariusz Kałan
- Language:English
- Subject(s):Supranational / Global Economy, Environmental and Energy policy, Geopolitics, Transport / Logistics
- Page Range:11-12
- No. of Pages:2
- Keywords:European Union; North-South Gas Corridor; Visegrad Group V4; Russian suppliers; energy market; gas supplies; Western Balkans;
- Summary/Abstract:The need for the physical integration of EU markets via the North-South Gas Corridor (NSGC or NSI), today constitutes a flagship initiative of the Visegrad Group (V4) and its closest neighbours. The idea to build the gas corridor has arisen from both the geographical proximity of these countries and the similarity of the problems they face, including limited interconnections, poor market liquidity, and the dominance of Russian supplies. It is fair to say that the V4 was able to learn a lesson from the 2009 Russia–Ukraine gas crisis. All of the Visegrad members, which at the time had around 70–80% dependence on both supplies and transport routes from the east, were, to various degrees, hit by the temporary interruption of supplies. This was thus illustrative, not only of how diversification in Central Europe is needed but also of how regional solidarity is necessary to efficiently manage the risk of sudden cuts in the future. It is worth remembering that during the crisis the Czech Republic established reverse flow to Slovakia, while Hungary made emergency supplies from its stockpiles available to the Western Balkans.
Letter from Director, Internal Energy Market, Directorate-General for Energy, European Commission
Letter from Director, Internal Energy Market, Directorate-General for Energy, European Commission
(Letter from Director, Internal Energy Market, Directorate-General for Energy, European Commission)
- Author(s):Klaus-Dieter Borchardt
- Language:English
- Subject(s):Supranational / Global Economy, Environmental and Energy policy, International relations/trade, Geopolitics, Transport / Logistics
- Page Range:13-13
- No. of Pages:1
- Keywords:Visegrad Group V4; North-South Gas Corridor; energy market; European Union; EU energy security;
- Summary/Abstract:The V4 has been and still is an important player in regional cooperation and the energy security landscape of Central and Eastern Europe. The group of four was also the driver behind the North-South Gas Corridor, which was later included as a priority of EU energy-security and energy-infrastructure policies.
The Czech Republic: Bringing the Rest Closer to the West?
The Czech Republic: Bringing the Rest Closer to the West?
(The Czech Republic: Bringing the Rest Closer to the West?)
- Author(s):Filip Černoch, Jan Osička
- Language:English
- Subject(s):National Economy, Environmental and Energy policy, International relations/trade, Geopolitics, Transport / Logistics
- Page Range:15-19
- No. of Pages:5
- Keywords:Czech Republic; energy security; additional gas suppliers; gas infrastructure; higher storage capacity;
- Summary/Abstract:At first glance, the Czech Republic—a landlocked state with very low domestic output and a high dependence on imports—may be seen as vulnerable in terms of energy security. However, thanks to the early adoption of a resolute policy of diversification, sound prospects for additional supplies, and a well-developed domestic market and infrastructure, the country should actually be considered one of the most secure among the Visegrad states. The share of natural gas in the Czech total primary energy supply (TPES) is less than half that of Hungary’s; the Czech Republic has a higher storage capacity than Poland; and, in comparison with Slovakia, has at least partially diversified imports.
Hungary: Collecting the First Dividends of Interconnectivity?
Hungary: Collecting the First Dividends of Interconnectivity?
(Hungary: Collecting the First Dividends of Interconnectivity?)
- Author(s):András Deák
- Language:English
- Subject(s):National Economy, Environmental and Energy policy, International relations/trade, Economic development, Geopolitics, Transport / Logistics
- Page Range:20-25
- No. of Pages:6
- Keywords:Hungary; coal resources; hydro-power potential; gas supplies; electricity demand; natural gas imports;
- Summary/Abstract:Hungary is a resource-poor country with only limited and relatively expensive coal (lignite) and hydropower potential. It has a considerable record of hydrocarbon production dating back to the late 1930s, but much of these conventional reserves have already been depleted. Domestic supplies of gas constitute around 20%, internal oil production provides less than 8% of total demand for the time being, and both are in decline. Thus, import dependency has long been a natural, and socially and politically accepted necessity. Hungary built up a significant nuclear component during the mid-1980s in Paks (four Soviet VVER blocs meet around 40% of electricity demand) and relies heavily on natural gas imports.
Poland: Northern Wishes, Southern Promises
Poland: Northern Wishes, Southern Promises
(Poland: Northern Wishes, Southern Promises)
- Author(s):Aleksandra Gawlikowska-Fyk, Dariusz Kałan
- Language:English
- Subject(s):National Economy, Governance, Environmental and Energy policy, International relations/trade, Geopolitics, Transport / Logistics
- Page Range:26-29
- No. of Pages:4
- Keywords:Poland; Visegrad Group V4; gas supplies; energy security; natural gas; gas market;
- Summary/Abstract:In comparison with the other Visegrad countries, Poland’s gas security seems relatively high. This coastal state, unlike the Czech Republic or Slovakia, not only has quite significant domestic output (4.3 bcm in 2012), which accounted for some 29% of the country’s demand, but also has a proportionately low level of natural gas in its TPES (13%). Poland is also a major coal producer, and coal comprises a significant portion of the country’s primary energy supply, ahead of all other sources, including gas. Thus, this data could suggest that Poland—as an insignificant natural gas customer—is not necessarily vulnerable in terms of energy security. However, although the country was only mildly affected by the 2009 cuts of supplies from the east, its position in the gas market is far from being fully protected.
Slovakia: Coping with the Past, Preparing for the Future
Slovakia: Coping with the Past, Preparing for the Future
(Slovakia: Coping with the Past, Preparing for the Future)
- Author(s):Kristián Takáč
- Language:English
- Subject(s):National Economy, Governance, Environmental and Energy policy, International relations/trade, Economic development, Geopolitics
- Page Range:30-35
- No. of Pages:6
- Keywords:Slovakia; gas supplies; energy market; energy security; country’s energy consumption; nuclear energy; renewable energy; natural gas; oil; coal; hydro energy;
- Summary/Abstract:Ensuring an optimal and balanced mix ranks among the top priorities of Slovakia in the field of energy. The composition of the country’s energy mix reflects the ambition of the Slovak government to have a secure supply for affordable and competitive prices, respecting at the same time the aspect of environmental sustainability. Due to substantial investments into nuclear energy and the growing volume of renewable energy (RES), Slovakia stands a good chance to reach by 2020 the 20-20-20 policy goals. According to 2011 data, the shares of various primary energy sources in net domestic consumption (NDC) was the following: natural gas, 26%; nuclear energy, 22%; oil, 21%; coal, 22%; RES, including hydro energy, 9%.
Croatia: On the Southern Flank
Croatia: On the Southern Flank
(Croatia: On the Southern Flank)
- Author(s):Ana-Maria Boromisa, Dariusz Kałan
- Language:English
- Subject(s):National Economy, Governance, Environmental and Energy policy, International relations/trade, Economic development, Geopolitics
- Page Range:36-40
- No. of Pages:5
- Keywords:Croatia; gas supplies; energy security; oil; natural gas; country’s energy consumption;
- Summary/Abstract:Croatia significantly differs from many Visegrad countries in terms of its gas security. First of all, natural gas is not the most important component of Croatia’s energy mix, accounting for only 28% of the total energy supply, significantly less than oil and its derivatives (70%). Total consumption is only 3 bcm, two times less than Slovakia’s and around four times less than Poland’s or the Czech Republic’s. Second, the country has a relevant amount of domestic natural gas production. Currently, this ranges between 1.9–2.5 bcm annually, which meets around 70% of total demand. Gas is taken from 17 on-shore and nine offshore fields. Proven reserves are estimated at 23.6 bcm, though if production is kept at current level, this is sufficient for only about 10 years. Although this significantly reduces import dependency, there are serious doubts as to whether in the future this beneficial share of domestic sources can be maintained.
Romania: No Direction in Gas Policy
Romania: No Direction in Gas Policy
(Romania: No Direction in Gas Policy)
- Author(s):Ana Otilia Nuţu
- Language:English
- Subject(s):National Economy, Governance, Environmental and Energy policy, International relations/trade, Geopolitics
- Page Range:41-45
- No. of Pages:5
- Keywords:Romania; energy policy; energy security; renewable energy sources; country’s energy consumption; electricity production; natural gas;
- Summary/Abstract:Romania has a relatively diverse energy mix, with significant renewable resources (hydro, wind) and with gas representing roughly 30% of the country’s energy consumption. The mix has changed significantly in the past 40 years, following irrational policies under communism, the depletion of reserves and then the transition to a market economy and the increase in the share of household consumption. Romanian gas production peaked in 1976 (when it reached roughly three times that of today), as Romania over-developed its chemical industry, but declined throughout the 1980s following an accelerated depletion of gas deposits and the increasing reliance on coal (e.g., if oil and gas represented 50% of electricity production in 1981, it was forecasted in 1986 that it would decline to just 5% in 1990). Gas imports from Russia started in 1977 and currently represent 25–30% of Romania’s consumption; Romania remains however one of the least import-dependent members of the EU and of the Eastern bloc. In 1989, household consumption of energy was just 5%; though the share has increased, it still remains the lowest in Europe, at half of the EU average.
Conclusions
Conclusions
(Conclusions)
- Author(s):Jarosław Ćwiek-Karpowicz, Dariusz Kałan
- Language:English
- Subject(s):Supranational / Global Economy, Governance, Environmental and Energy policy, International relations/trade, Economic development, EU-Legislation, Geopolitics, Transport / Logistics
- Page Range:46-48
- No. of Pages:3
- Keywords:European Union; importance of gas; North–South Gas Corridor; geopolitics; energy policy; transport of natural gas; EU legislation; energy security; alternative gas suppliers;
- Summary/Abstract:The forthcoming years should prove the strategic importance of gas. The gradual replacement of coal as part of the effort to meet the requirements of EU legislation, the growing number of plants producing subsided biogas, and the dramatic changes introduced by the dawning of unconventional gas in North America have created a window of opportunity for natural gas to become a fully-fledged energy resource. The role of gas in Europe will also increase when plans for re-industrialisation—seen by many as a crucial factor to prop up the EU economy—are implemented, since the main sector that consumes gas has been traditionally industry. These are the reasons for why one may predict that in Central Europe in the next 15 to 20 years, the share of natural gas in the overall energy mix will remain rather stable, and may even increase.
Selected Bibliography
Selected Bibliography
(Selected Bibliography)
- Author(s):Author Not Specified
- Language:English
- Subject(s):Bibliography
- Page Range:49-49
- No. of Pages:1
Annexes
Annexes
(Annexes)
- Author(s):Author Not Specified
- Language:English
- Subject(s):Supranational / Global Economy, Energy and Environmental Studies, Maps / Cartography, International relations/trade, Geopolitics, Transport / Logistics
- Page Range:53-67
- No. of Pages:15
- Keywords:annexes; North–South Gas Corridor; maps; corridor interconnectors; energy policy; Visegrad Group V4;