Important Projects of Common Interest in the Balkans
The Projects of Common Interest (PCI) as envisaged by the European Commission in Brussels, clearly aim to interconnect the Balkans and the surrounding regions to facilitate the emergence of hubs and new transit routes. Whether that strategy could be practical in the long-run remains to be seen: There are multiple variables that have to be taken into account.
One of the approved PCIs is the Tesla route, a pipeline that aims to connect Greece with Austria, traversing the ex-Yugoslav states and Hungary. The project is actually a spur of the Turkish Stream one that is planned to cross the Black Sea towards the European part of Turkey and then reach up to Northern Greece.
Despite that, the Turkish Stream pipeline project has not been included as a PCI, a fact that may sound contradictory to some. The reason for Tesla's inclusion--and not Turkish Stream's--could be because the Tesla pipeline would be an autonomous project that will aim to source different (not Russian) sources of gas. The sources of the Tesla pipe's gas is an issue that has yet to be fully analysed or decided.
An argument could also be made that Tesla has been included because it could serve as a possible link to the Trans-Adriatic Pipeline (TAP), rather than the Turkish Stream pipeline, in future. If that happens, TAP's business plan will have to change dramatically, since it has been designed for smaller quantities of gas than those that would be needed if Tesla becomes an integral part of it. Furthermore TAP is supposed to have its own spur, the Ionian-Adriatic Pipeline (IAP). Instead of being routed through the Central Balkans, IAP is planned to follow an Albania-Bosnia-Croatia route with a smaller by-route to Kosovo. The routing and gas quantity issues would have to be dealt with before Tesla could be considered as complimentary route with the TAP one.
All that said, Tesla's gas sources seem, for the moment, to be decided upon. Tesla itself has already been theoretically agreed upon by the participating countries, where it has been explicitly said that the source of gas will be from Russia. The companies drafting the preparatory work, such as DESFA, FGSZ, GA-MA, and Srbijagas, have all been major clients of Russian giant Gazprom's gas for decades. The pipeline aims to terminate in the Baumgarten gas hub in Austria and it will have a reverse flow capacity, planned to be completed by 2019. Reverse flow is a major component in energy security considerations. Practically speaking, though, it means Russian gas will flow in both directions since the Austrian hub mainly mixes Russian gas with smaller quantities that are being received by Netherlands and Norway via interconnectors.
The PCI list also contains the Eastring route that aims to link Greece with Bulgaria, Romania and Hungary with a capacity of up to 40 billion cubic metres (bcm) per annum. The novelty in this case is that it contains provisions that it will be coupled by new LNG facilities in Greece that will receive gas from non-Russian suppliers. That LNG will then be entered into the gas mix to be transferred northwards.
At first glance, it looks like Tesla and Eastring are in competition with each other and that both projects cannot proceed in parallel due to a lack of consumer need for further gas supplies. The case is complicated further when one takes into account the proposed Nord Stream-II pipeline. That project aims to greatly increase direct gas supplies from Russia to Germany that could then, quite easily, flow to the Baumgarten hub. In such a case, the Turkish Stream has no future and Teslam due to its reverse flow, has an advantage for cheaper gas than the LNG-added Eastring one.
It will take some time, perhaps three to four months, before the situation settles down enough to see whether Nord Stream-II will go ahead. Right now, the German political leadership is supporting its aims, albeit in a diplomatic fashion. The supply routes for Nord Stream-II would start from the north of Europe going to the south, a path that also follows sound business planning since a large consumer base is to be found in the region North of Danube. Geopolitical considerations can't be ignored, though. The "Ukrainian question" will have to be resolved as well as the brinkmanship between NATO and Russia before a crystal-clear image emerges regarding the feasibility of all these schemes.
Until then the EU is content to keep most countries happy with the inclusions on the PCI list. Those include smaller players, vying for hubs and routes that may turn out to be imaginary in nature. Regardless of each project's viability, the news, for now, may just serve to appease the electoral base of each country.