Abstract: The launch of the Transadriatic Pipeline (TAP) has spearheaded the export of gas from the Caspian to Italy and Southeast Europe and inaugurated the much-discussed Southern Gas Corridor.  Greece and its Balkan neighbors are set to derive economic and political benefits from the diversification of supplies. Azerbaijan might gain further market share in the region in the 2020s should TAP double its capacity. However, such an outcome is contingent on the development of cross-border connections as well as regulatory and institutional reforms in both EU member states and the candidate countries of the Western Balkans. Russia’s Gazprom will therefore remain a leading supplier in the 2020s but face stiffer competition from other gas exporters.

The Southern Gas Corridor connecting the EU and the hydrocarbon-rich Caspian region is now a reality. The Transadriatic Pipeline (TAP) started operation on November 14, 2020, and now consumers in Italy have access to natural gas from the Shah Deniz offshore field in Azerbaijan.  It is hard to overestimate the significance of this new development for Azerbaijan and Turkey, as well as Southeast Europe. The new pipeline runs over 878 km from the Turkish-Greek border through Greece and Albania, crosses the Adriatic Sea, and terminates in Melendugno, in Italy’s southern Italian province of Puglia. TAP has an annual capacity of 10 billion cubic meters (bcm) which, according to the Shah Deniz consortium of energy companies, could be doubled to 20+ bcm in the 2020s. That is a significant volume for Southeast Europe where Greece and Bulgaria each have signed contracts to buy 1 bcm of Azerbaijani gas yearly. TAP furthermore consolidates Turkey’s new role as a transit country and adds Azerbaijan to the list of suppliers on the European gas market.