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Southern Gas Corridor / Euro-Caspian Mega Pipeline

The route and the three pipelines of the Southern Gas Corridor.

Key points

  • Project is slated to receive unprecedented support from public finance institutions. more >>

  • Study reveals a worrying track record of criminal and corrupt activities among companies building the pipeline. more >>

  • Project would widen surplus in Europe’s gas import infrastructure and likely turn into stranded asset. more >>

  • Constructions are having large, unjust impacts on local communities in transit countries. more >>

  • Gas to come from Azerbaijan, but deal will strengthen repressive Aliyev regime. Human rights defenders to take the brunt. more >>

  • Web documentary shows project not needed, highlights opposition and alternatives to pipeline. more >>


Record loans from public banks

Click for more details >>


Key facts

Costs: estimated at USD 45 billion
Length: 3500 km
Capacity: 16 billion cbm of gas annually


  • South Caucasus Pipeline extension (SCPx): Azerbaijan-Georgia
  • Trans-Anatolian Pipeline (TANAP): Turkey
  • Trans-Adriatic Pipeline (TAP): Greece-Albania-Italy

Gas supply

  • Azerbaijan: Shah Deniz gas field, located in the Caspian Sea
  • Turkmenistan: maybe at a later stage
  • Iran: has been mentioned

See a breakdown of approved and proposed public finance for the Southern Gas Corridor (Google sheet)

The European Bank for Reconstruction and Development (EBRD) already approved two loans for the Shah Deniz stage 2 gas field (USD 200 million and USD 250 million, the latter as part of a larger package, (see below)) and is considering a third to the tune of USD 100 million. It is currently also reviewing the concept for a loan for TANAP (size as yet unclear) while having stated that it considers USD 1 billion for TAP and TANAP together.

On top of USD 250 million for Shah Deniz stage II (as part of a USD 1 billion financing package with the EBRD and commercial banks), the Asian Development Bank (ADB) approved in December 2016 an additional USD 1 billion for the Shah Deniz II gas field.

The European Investment Bank (EIB) considers EUR 2 billion for TAP and EUR 1 billion for TANAP.

The World Bank approved two USD 400 million loans for Turkey and Azerbaijan for TANAP. The World Bank's Multilateral Investment Guarantee Agency (MIGA) approved a guarantee of up to USD 950 million for TANAP against the risk of non-honoring of a sovereign financial obligation.

The Asian Infrastructure Investment Bank (AIIB) approved a USD 600 million loan for TANAP (pdf) at an unannounced extra-ordinary virtual Board meeting on December 21. (The AIIB's project summary also states the combined EIB and EBRD support for TANAP as USD 2.1 billion, which suggests that, like the EIB, the EBRD is considering EUR 1 billion for TANAP.)


Earlier, already completed loans from the EBRD include support for the Southern Caucasus gas pipeline (SCP) (USD 70 million for Lukoil (2005) and USD 60 million for SOCAR (2004)) and the Shah Deniz gas field (USD 110 million for Lukoil (2005) and USD 100 million for SOCAR (2004)).

Both Shah Deniz and the South Caucasus Pipeline are considered parts of the Southern Gas Corridor's infrastructure as the EBRD's Managing Director for Energy and Natural Resources, Riccardo Puliti has stated.


Backing from Brussels

The pipeline is a key element of the Energy Union, the European Commission's flagship initiative. TAP could also benefit from financing through the Project Bond Initiative as a Project of Common Interest.


A predictable stranded asset

Massive new gas infrastructure like this will lock Europe into fossil fuels for decades and will lead to hundreds of millions of tonnes of CO2 emissions.

The EU already has an overall surplus of gas import infrastructure. Especially since the 2007 recession, gas demand has significantly decreased (pdf) and is not expected to bounce back until the 2020’s.

The European Union’s 2050 Energy Strategy expects natural gas imports to further decrease under all scenarios. The 2020’s, when the pipeline is expected to be operational, should already mark a significant reduction in gas demand according to this roadmap.

The Southern Gas Corridor would only widen the surplus in Europe’s gas import infrastructure and likely turn into a liability.

>> Read more:
Pipe dreams - why public subsidies for Lukoil in Azerbaijan will not reduce EU dependency on Russia
Study | January 21, 2015

No security for Europe from the Southern Gas Corridor
Blog post | May 15, 2016


Gas firms lobbied to weaken EU renewables target

Bringing more gas to Europe would be at odds with the EU's climate leadership aspirations, its emission reduction goals (40% cut by 2030) and its renewables targets (27% in 2030).

This dissonance between the EU's goals and planned investments is no coincidence. Big energy corporations have a great deal to lose if we shift away from a centralised energy system that depends on fossil fuels.

Gas companies like BP, one of the main companies involved in the Southern Gas Corridor, have lobbied intensively against renewables subsisides and for a greater role for gas in the EU's energy plans.

>> Read more:
BP lobbied against EU support for clean energy to favour gas, documents reveal
guardian.co.uk | August 20, 2015

Walking the line, Chapter 4.1 Big energy
Web documentary | March 8, 2016


Risky business - Who benefits from the Southern Gas Corridor?

No less than 15 firms contracted to build TAP and TANAP, the two main sections of the Southern Gas Corridor, have been implicated in various forms of corruption in the past.

All the details and an interactive presentation are at https://bankwatch.org/risky-business

Image with text: 15 dodgy companies, 2 pipelines, billions in European public money'


Web documentary

Experience a walk along the pipeline and imagine the devastating consequences for people and the environment from Azerbaijan to Italy if the project is built. Watch the web doc >>

Watch the web doc


Impacts and opposition in transit countries


The section of the beach where TAP would hit shore. (Click to see larger image. Source for location: TAP official website.)

The TAP pipeline is supposed to reach land in San Foca in the Melendugno municipality. San Foca has received European Blue Flags for not one but two beaches, awarding water quality and environmental management among others.

Fearing the destruction of their coastline and negative effects on tourism, agriculture and fishery, local mayors and their constituencies are viciously opposing the TAP pipeline and the risks of accidents associated with the related infrastructure.

Read more:
Italian communities block pipeline works to save ancient olive trees


Albania & Greece

Land acquisition for the pipeline and the compensation of local farmers has led to a number of grievances and irregularities in both Greece and Albania. Some farmers have lost the majority of their income while receiving a pittance in return.

Read more:
Last harvest looming for Albanian farmers along pipeline route
Multimedia story | December 7, 2016

'We have no other option' - Preparation of the Trans-Adriatic Pipeline in Albania (pdf)
Study | August 4, 2016

When Athens can’t tell a Trojan horse
Multimedia story | December 2, 2016


“I was arrested and tortured for speaking out against the BTC pipeline. If the [Southern Gas Corridor] goes ahead, people living along it will experience the same repression.”

Ferhat Kaya, Turkish activist in the Ardahan province (Source: Platform)


The Trans Anatolian Pipeline (TANAP) pipeline will pass through twenty provinces in Turkey. It will create a high security, militarised corridor across the whole country, with costs estimated at USD 11.7 billion.

Although Turkish officials claim that the pipeline will result in higher employment, lessons from the BTC pipeline indicate that locals may rather face loss of land and livelihoods, environmental problems and repression if they dare to protest.


Strengthening the dictatorship in Azerbaijan

In Azerbaijan the Aliyev family’s dictatorship has held onto power for the past two decades through a combination of holding fraudulent elections, prosecuting and assaulting critics and curtailing media freedom.

During the October 2013 presidential elections almost 150 political prisoners were behind bars in Azerbaijan. The OSCE criticised the elections for failing to meet international standards on free and fair elections.

Since summer 2014, ahead of the inaugural European Games in Azerbaijan, unprecedented levels of arrests and attacks on civil society, even by Azerbaijan’s standards, have occurred. By 2015 several renowned human rights defenders have been sentenced to years in prison. The OSCE was ordered by Azerbaijan to close their mission in the country. Critical voices, including the guardian and amnesty international, were banned from covering the European Games in Baku.

The EBRD’s founding mandate states that it must only work in countries that are committed to democratic principles. Azerbaijan is proving itself to be the opposite.

Read more in a letter by the Sports for Rights campaign to the EBRD

Khadija Ismayilova, an outspoken critic of the Aliyev regime, has been blackmailed, threatened and arrested.


Azerbaijan downgraded in Extractive Industries Transparency Initiative

The Board of the Extractive Industries Transparency Initiative (EITI), a coalition of companies, governments, investors and civil society organisations has unanimously downgraded Azerbaijan to a "candidate country". Azerbaijan will be suspended from the EITI in April 2016 if it does not comply with a set of requirements that ensure civil society can work freely in the country.

By approving a loan for the Shah Deniz gas field, the EBRD is in fundamental conflict with its own policies that explicitly commit the bank to the EITI process. The EBRD’s Energy Policy states that “[t]he Bank is committed to adhere to best governance, transparency and revenue management standards by requiring its clients to implement the principles and requirements of the EITI.”

>> Read more
Publish What You Pay: 'Lukoil loan would fundamentally contradict EBRD policies' (pdf)
Advocacy letter | July 21, 2015


Oil, gas, money, power

"[O]il has kept autocrats in power by enabling them to increase spending, reduce taxes, buy the loyalty of the armed forces, and conceal their own corruption and incompetence..."

Micheal L. Ross, 'The Oil Curse: How Petroleum Wealth Shapes the Development of Nations', 2012

Without properly functioning democratic institutions, rule of law and effective checks and balances for the president's powers, investments in Azerbaijan's oil and gas sector will further cripple democracy in the country.

Hydrocarbon revenues provide the Aliyevs with the finance needed to pay security forces and establish a secure income and therefore enabled them to ignore citizens’ voices because they are not reliant on those citizens for a tax base.

Human rights activist Rasul Jafarov spoke about this shortly before his arrest. Referring to an earlier mega pipeline project that has equally been criticised, he said:

“Before the oil and gas incomes came to Azerbaijan we had more democracy and freedom. The main income from oil came in 2005 when the Baku-Tbilisi-Ceyhan pipeline started to operate. And from that time the situation started to deteriorate.”


>> Read more:
Europe's Caspian gas dreams - a nightmare come true for human rights in Azerbaijan
Blog post | May 15, 2015

Sport for Rights to EBRD: No public money for Lukoil and mega gas project in Azerbaijan
Advocacy letter | July 20, 2015



The BTC pipeline - will history repeat itself?

The Baku-Tbilisi-Ceyhan (BTC) oil pipeline project, financed by the EBRD and other public lenders, was touted as a world class model development project and BP, the project sponsor, agreed to standards set by the OECD and the US and UK government’s principles on human rights (pdf).

Yet criticising the BTC pipeline was not tolerated in the three countries involved - Azerbaijan, Georgia and Turkey. While journalists were arrested in Azerbaijan, critics were intimidated, arrested and even tortured in Turkey.

In 2011, the UK government announced that the BTC Company had broken the commitments it had made to international human rights standards. Already in 2010, following a complaint to the U.S. government, the Overseas Private Investment Corporation, another project investor, recommended (pdf) that BP needed more precautions to safeguard the pipeline and “to comply with the applicable environmental and social policies and guidelines of the lenders [...] and with national law.”

The Oil Road - How a done deal continues to unravel
Bankwatch Mail article | October 8, 2012


See an overview of the shareholders of Shah Deniz and the three pipelines in this spreadsheet >>


Background: Shareholder companies


With total revenues of USD 358.7 billion for 2014 alone, British Petroleum (BP) is one of the world’s largest oil and gas companies. Yet, it is also renown for Deepwater Horizon, the largest marine oil spill in history.


The State Oil Company of Azerbaijan (revenues in 2014: USD 39.7 billion) is one of the strongest Azeri institutions holding the Aliyev dictatorship in place. SOCAR uses its own paramilitary force to silence journalists. It is known for a general lack of transparency and links to the Aliyev dictatorship.


Lukoil is the second largest Russian oil and gas company (revenues in 2013: USD 141.5 billion). Apart from the problem of entrusting a Russian company to diversify the EU away from Russian gas, Lukoil is responsible for numerous oil spills and accidents in Russia, while receiving money from the EBRD.

See an overview of the shareholders of Shah Deniz and the three pipelines in this spreadsheet >>




Latest developments


Blog entry | August 4, 2016

What is a perceived source of security for some can cause instability for others’ lives.

Bankwatch in the media | July 27, 2016

CEE Bankwatch, një rrjet organizatash mjedisore në Europën Qendrore dhe Lindore, i ka kërkuar bankave Europiane për zhvillim të mos e financojnë projektin e gazsjellësit TAP, duke cituar kompensimin e padrejtë të qytetarëve shqiptarë të prekur nga projekti – të cilën ato e cilësojnë si të panevojshëm për sigurinë energjetike të Europës.

Të hënën presidenti i Bankës Europiane për Rindërtim dhe Zhvillim Suma Chakrabati do të vizitojë Tiranën, ndërkohë që BERZH po vlerëson një kredi prej 1.5 miliardë euro për Gazsjellësin Trans Adriatik, TAP, – kredia më e madhe në historinë e bankës.

Blog entry | May 24, 2016

A graffiti in Warsaw marks the upcoming birthday of imprisoned Azeri journalist Khadija Ismayilova.

Blog entry | May 16, 2016

With an ownership structure heavily influenced by Azerbaijan, the European Commission’s flagship energy project may end up being a costly piece of infrastructure that does not increase Europe’s energy security but offers a tool for political leverage to the authoritarian Aliyev regime.

Blog entry | April 15, 2016

The Southern Gas Corridor risks locking in higher fossil fuel dependence and wasting colossal amounts of public money.


Leaflet | April 29, 2015

Europe talks of diversifying energy supplies from Russia by building a set of pipelines from the shores of Azerbaijan's Caspian Sea to Italy. But the EU's dependency on Azerbaijan for fossil energy fuels repression and feeds the authoritarian Aliyev regime. All the while, Europe does not need all that gas.

Advocacy letter | April 9, 2015

Given the size of the Southern Gas Corridor project it is important that its effects on the environment and especially nearby Natura 2000 sites are duely accessed and that the necessary time to conduct public consultation both in the EU-28 countries and outside of the EU-28 as indicated to the Commission during various meetings related to the second list of PCIs preparation.

Study | January 21, 2015

The study explains why the Southern Gas Corridor, the EU’s new pet energy project, is not only unnecessary in light of gas demand projections, but also seems likely to fall short on the much flaunted goal of bringing energy independence from Russia.

Briefing | December 22, 2014

Despite the Russian invasion in Ukraine leading to EU and US sanctions against Moscow and major Russian energy companies, public banks supported by EU countries are gearing up to offer almost a billion dollars in financial support to Russian company Lukoil for gas extraction in Azerbaijan.

Bankwatch Mail | August 8, 2014

The hiring of former British prime minister Tony Blair to advise a BP-led consortium pushing forward with plans to pump Caspian gas from Azerbaijan to Europe has bumped the 'Euro-Caspian Mega Pipeline' (ECMP) into western media coverage and lead to criticism of yet another unsavoury Blair consultancy.