Expansion status and commercial conditions
Expansion of the Southern Gas Corridor remains on hold as European buyers have not committed sufficient long-term offtake or financing. This limits the prospect of materially higher Caspian gas flows into Southeast Europe. SOCAR said no final investment decision has been taken.
The constraint is increasingly commercial rather than technical. Pipeline build-out is therefore tied to contract and financing commitments that can support large-scale investment.
Capacity scenarios for TAP, TANAP and the South Caucasus Pipeline
One expansion scenario would raise TAP capacity to 23.3 bcm/year from 10.5 bcm/year. It would also increase TANAP to 31.7 bcm/year from 16.2 bcm/year. In parallel, the South Caucasus Pipeline would reach 33.6 bcm/year from 24 bcm/year.
Azerbaijan estimates construction would require roughly five years after commercial commitments are secured.
Diversification demand in Southeast Europe versus contract requirements
Southeast European markets including Greece, Bulgaria, Romania, Serbia, Hungary, Croatia and North Macedonia are actively seeking diversified gas. However, pipeline expansion requires long-term contracts capable of supporting billions of euros of investment. This creates tension with EU policy.
Buyers want additional non-Russian gas but may be reluctant to sign very long contracts while European policy simultaneously targets lower fossil-fuel consumption. Without those commitments, Azerbaijan has little incentive to invest in significantly larger export infrastructure.
Interconnectors built ahead of upstream supply
The stalemate matters for Southeast Europe because the region has already built many of the interconnectors needed to receive additional Caspian gas. Physical access is improving faster than upstream supply. The next stage of diversification therefore depends less on constructing Balkan pipelines and more on whether European buyers are willing to guarantee demand for the gas that would fill them.
