SE Europe gas markets: towards integration
SE Europe as a regional gas market is often overlooked because of its small size – just 25 bcma aggregate demand. However, this misses the point of its important role in other wider issues. With Russia the dominant supplier, its countries have played a transit role for Russian gas into the region and to Turkey. These flow patterns will now change from 2 developments. First, as Turk Stream is commissioned from the end of 2019, transit through Ukraine will be reduced, most of the existing 25 bcma Trans Balkan Pipeline system in Romania and Bulgaria will become empty, and some new capacity will be needed to handle Turk Stream Line 2 gas. Secondly, volumes will rise as TAP is commissioned at the end of 2020. There is a third potential development if the Romania offshore starts up in the early 2020s, turning Romania into a net exporter and probably able to supply most demand growth in the region. The region is basically a collection of island markets, poorly interconnected. The EU has a policy initiative CESEC to fast-track a number of interconnector and LNG regas projects, but to-date delivery has been unimpressive. This paper puts all these dynamics into context, and argues that if current interconnectivity plans can be delivered, the region will see improved security of supply and become a functioning gas market region by the mid-2020s.