Caspian Report - Issue 06 - Winter 2014

ROBERT M. CUTLER
34
Bosnia-Herzegovina, Croatia, Kosovo,
Macedonia, Montenegro, and Serbia.
It should be noted that Romania accounts
for about two-thirds of these
totals, and Bulgaria for a third of remainder.
However, these figures appear
to have been predicated on precrisis
conditions.
The supply gap then projected among
the SEE-7 countries (i.e. excluding EU
members Romania and Bulgaria)
was 3.0 bcm for 2010, 4.0 bcm for
2015, 6.5 bcm for 2020, and 8.0 bcm
for 2025. 3 However, by 2012 this
gap was already close to 4.5 bcm, of
which Serbia and Croatia together accounted
for nearly six-sevenths. The
extremely harsh winter in the region
accounted for this strong demand,
against a background of otherwise
reduced consumption due to the economic
crisis. 4
At the penultimate stage of pipeline
selection for Shah Deniz Two, in September
2011, a BP-proposed pipeline
project called the South East Europe
Pipeline (SEEP) was announced. It
would have run from eastern Turkey
to eastern Austria through Bulgaria,
Romania, and Hungary. However,
there were conflicting reports
naming either Croatia or Slovenia
as transit countries; other reports
named neither of them. Yet neither
was actually required, since the destination
gas hub of Baumgarten an der
March is in eastern Austria, about 65
kilometers from the country’s border
with Hungary.
Croatia and Slovenia are, along with
their neighbors, among those European
countries with the least diversified
gas supply. Consequently
the mention of them as purchasers
would have gone hand in hand with
the construction of relatively inexpensive
bi-directional gas interconnectors,
creating a gas ring in the
region and increasing the energy
security of all involved. The European
Commission endorsed such
engineering projects in principle as
early as 2008 under the umbrella of
its “supergrid” project, permitting
EU member states to share electric
power from different sources. 5 Only
with Lithuania’s recently concluded
presidency of the EC, however, with
its specific Energy Agenda, were
those projects in Southeast Europe finally
included in the EU budget under
a regular heading for completion.
2.3. South Stream and the SGC
Moscow continues to insist that South
Stream is none of the EU’s business,
3
. See “Projected supply gap in seven SEE markets,” Figure 13 in the original feasibility study, South East
Europe: Regional Gasification Stud; Final Report, p. 49. The study was executed by a consortium
of four industry consulting firms and is available at . Compare Anastasios Giamouridis and Spiros Paleoyannis, Security of Gas
Supply in South Eastern Europe: Potential Contribution of Planned Pipelines, LNG, and Storage, NG-
52 (Oxford: Oxford Institute of Energy Studies, July 2011). All URLs cite were retrieved and verified
on 21 February 2014, unless otherwise stated.
4
. For details, see Energy Community Secretariat, Annual Report on the Implementation of the Acquis
under the Treaty Establishing the Energy Community, September 2012, < http://www.energycommunity.org/pls/portal/docs/1770178.PDF>.
5
. For an introduction and background, see Energy Community, “Gas Ring Concept,” .