Russia-Caspian: The challenge of EU gas diversification

The gas crises between Russia and Ukraine have brought the issue of gas security to the forefront of Europe's energy policies. At the same time, the liberalization of EU gas markets is likely, in the long term, to profoundly change relations between suppliers and consumers, hitherto organized around take-or-pay contracts. It is against this backdrop that the EU is considering the opening of a fourth natural gas supply corridor, to diversify both routes and sources of supply. However, several factors could call this strategy into question. The August 2008 crisis between Georgia and Russia demonstrated the fragility and instability of gas supplies to Europe from the Caspian via the 'Caucasian route'. Whether or not the 'Southern Corridor' materializes will depend on economic factors, but also on the more geopolitical ones relating to major regional political uncertainties